statistics assignment attached

problemset_7_tree.xlsx

Sheet1

Problem Set 7	Dustin's research
	positive (YR)	negative (NR)	MARGINAL PROB										55%
Viable (YV)	P(YV&YR)	P(YV&NR)	P(YV)										Viable (YV)
Not viable (NV)	P(NV&YR)	P(NV&NR)	P(NV)														$252
MARGINAL PROB	P(YR)	P(NR)	1							Buy			$500	$252
										($248)	27		45%
	positive (YR)	negative (NR)	MARGINAL PROB										Not viable (NV)
Viable (YV)	33.0%	22.0%	55%	<–			No research										($248)
Not viable (NV)	13.5%	31.5%	45%	<–					1				0	($248)
MARGINAL PROB	46.5%	53.5%	1				0	27
P(YR\|YV)=	60%	P(NR\|YV)=	40%							Don't buy
P(YR\|NV)=	30%	P(NR\|NV)=	70%														0
										0	0
Conditional Probabilities:
P(YV\|YR)=	71.0%	P(NV\|YR)=	29.0%												71.0%
P(YV\|NR)=	41.1%	P(NV\|NR)=	58.9%												Viable (YV)
																	$236
Cost of research	($16)			Buy Biz with or without research?									Buy		$500	$236
						2
Cost of business	($188)			Rollback EV:	33.68								($248)	90.8387096774	29.0%
Cost of refurb on purhcase	($60)									46.5%					Not viable (NV)
Cost of business	($248)									Positive research (YR)							($264)
												1			0	($264)
Potential payout	$500									0	90.8387096774
													Don't buy
																	($16)
													0	($16)
							Research
															41.1%
							($16)	33.68							Viable (YV)
																	$236
													Buy		$500	$236
													($248)	-58.3925233645	58.9%
										53.5%					Not viable (NV)
										Negative research (NR)							($264)
												2			0	($264)
										0	-16
													Don't buy
																	($16)
													0	($16)