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Decision Tree Exercise

Istructions:-

The executive team of Makin’ Cash Corporation (a fictitious organization) is seriously considering engaging in a joinventure (option join) with another organization on a new product. If they do so, it will be at the expense of continuing tobuild momentum on a product suite they launched two years ago. In order to be persuaded to enter the joint venture, theMakin’ Cash team wants to see a 30% increase in revenues (consequence) as compared to their existing product line. You are members of a consulting team engaged to do the analysis. If there is at least a 30% improvement in revenues,then Makin’ Cash will enter into the joint venture. Complete the decision tree and submit your analysis andrecommendation to the executive team.

Hint: You are looking to maximize the benefit to the organization. Once you have completed your calculations compare thetwo costs. If engaging in the joint venture is more than 30% of continuing as they are, then you join.