A group of medical professionals is considering the construction of a private clinic. If the medical de-mand is high (i.e., there is a favorable market for the clinic), the physicians could realize a net profit of $100,000. If the market is not favorable, they could lose $40,000. Of course, they don’t have to proceed at all, in which case there is no cost. In the absence of any market data, the physicians’ best guess is that there is a 50–50 chance the clinic will be successful. Construct a decision tree to help analyze this problem. What should the medical professionals do?
Q: Consider that Kiwi, an apparel producer, practices a chase strategy. Production last quarter was…
A: Demand for Six Quarters : 1000,800,900,1100,1200,900 Last Quarter Production: 1000 units Hiring…
Q: Elaine wants to invest in a company, what financial statement should she will check first? Income…
A: If Elaine wants to invest in a company she should firstly check the income statement.
Q: A manufacturing plant has reached full capacity. The company must build a second plant—either small…
A: a. The rectangular nodes represent the decision nodes and the circular ones are chance nodes.
Q: Tim has to decide whether or not to build a new processing facility. If the new facility succeeds,…
A: The expected value of perfect information is the value that a medical services leader would pay to…
Q: 1. What steps should the company launching the product take in order to mitigate product launch…
A: Cautious planning and market analysis should be done in advance so that every possible risk can be…
Q: A machine tool salesperson offers XY plant equipment that would increase their fixed cost by…
A: The data is given as follows: Fixed cost1= $300,000 and variable cost is $40 and selling price is…
Q: our manager is quite concerned about the recent deterioration of a section of the roof on a building…
A:
Q: ss the magnitude of residual risk and then devel
A: When a residual risk is assessed, the security team must create a risk management strategy.
Q: Calculations: 1. You are valuing a 10-acre vacant lot with a septic system and a well on site. The…
A: Against this establishment, the appraiser is supposed to investigates the characteristics of the…
Q: Given: Cost Effectiveness…
A: Current Treatment- cost - $100000 Effectiveness- 4 life years health utility index- 0.5 New…
Q: 9. Dana is 30 years old and owns a wedding planning business. She takes care of all wedding events…
A: A negative letter refers to the business writing that contains the information related to bad news…
Q: f the fixed costs of manufacturing a new cell phone are $40,000, the sales price is $200, and…
A: The point at production cost and revenue comes at the same point or amount. This situation is the…
Q: ng risks? An example might
A: Project risk management is the process of identifying potential risks to a project and formulating…
Q: After a successful newspaper business, Jimmy plans to expand by opening an icrecream shop, only if…
A: The Expected Value (EV) indicates the weighted average of conveyed alternatives; to compute this…
Q: Private Insurance provides coverages that can be used to meet specific loss situations. For each of…
A: A. The type of insurance coverage will be "Payment Protection Insurance". This type of insurance…
Q: An electronics firm is currently manufacturing anitem that has a variable cost of $.50 per unit and…
A:
Q: Monica Britt has enjoyed sailing small boats since she was 7 years old, when her mother started…
A: The decision tree is shown below.
Q: when customer is bragging on some features that is not actually available with the product like…
A: Answer is "d" beuase either he has that product with him or he want to purchase similar product…
Q: To protect themselves, restaurant owners should make their lease contingent on obtaining the…
A: Obtaining licences and permissions is one of the first duties for any new business. Even an…
Q: You are the project manager for a railroad construction project. Your sponsor has asked you for a…
A: This question is asking you to create a forecast using the estimate to complete (ETC), which uses…
Q: 5. Joy bought a 16GB memory card at Php600 and decided to sell it to her sister for Php650. 6. Phil…
A: The above questions are from the topic: Profit and Loss. The answer to the questions are given…
Q: A circus is scheduled to appear in a city on a given date. The profits obtained are heavily…
A: Sunny Prior Conditional Joint Revised (Posterior) Good 0.5 0.7 0.5*0.7 = 0.35 0.35/0.45=0.78…
Q: A group of doctors is considering the construction of a private clinic. IF the medical demand is…
A: DECISION TREE: For favorable market - profit of P100,000. For unfavorable market - loss of…
Q: When planes fly in cold weather, the planes need to be de-iced before liftoff. Why is that done?
A: Planes are designed to adapt to limits of temperature, permitting them to take off from searingly…
Q: Williams Auto has a machine that installs tires. The machine is now in need of repair. The…
A: Decision to either repair or replace the machine can be effectively taken by making a comparison…
Q: Matt Mona is in the process of purchasing a motel near a college town. Themotel costs $3,500,000.…
A: Motel Cost = $3,500,000: Number of years = 39 Lot costs = $500,000 = land will appreciate at an…
Q: Suppose that an aircraft manufacturer desires to make a preliminary estimate of the cost of building…
A: Cost is the sum of money used by the manufacturer to manufacture and sell the commodities in the…
Q: A project will cost $45,000 to develop.• When the system becomes operational after a one-year…
A: Year Cash Flows Cumulative Cash Outflows: Initial Investment 0 (45,000) (45,000)…
Q: In Benefit/cost ratio analysis, if the salvage value is used to recover the first cost, it is being…
A: As a general rule, the rescue esteem is significant on the grounds that it will be the conveying…
Q: An ol company is considering two sites on which to dr. The stes are described in the following…
A: Given data is Site A: Profit = $120 million Loss = $20 million Probability of finding oil = 0.2 Site…
Q: 2. A toy manufacturer has three different mechanisms that can be installed in a doll that it sells.…
A: Given: Alternative Light demand Moderate Demand Heavy Demand Wind-up action 325,000…
Q: Company A has successfully launched its product in the market and has reaped rich dividends for the…
A: The possible reason for this situation is :
Q: As part of their application for a loan to buy Lakeside Farm, a property they hope to develop as a…
A: Taking the number of rooms occupied in a month a 'X' . Given: Fixed Cost = $ 6,000 Variable Cost =…
Q: Determine the effect on the break-even point in sales dollars considering each of the following…
A: The Break-even point is the point where the production cost and revenue gained from selling the…
Q: Who's started Nanina's Gourmet Sauce?
A: Professor Buzza gave his class the assignment of starting a pasta sauce company.
Q: 1. The income statement is a statement that shows the result of the operation of the business. In…
A: Given Revenue for the first quarter = Php 155,000 Expenses for the first quarter = Php 80,000
Q: Takyiwaa, Salamatu and Adade are Undergraduate Students from the University of Professional Studies…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Jobs arrive at Loaf Machine Shop. Assume the arrival rate is five jobs per hour. Service times (in…
A: Given: For design A:mean service time = 6S.D = 3For design Bmean service time = 6.25S.D = 0.6
Q: The frequency of breakdown of a machine that issues lottery tickets is given in the following…
A: Any production system using machines will have its share of breakdowns. Every breakdown means a cost…
Q: Hyewon Kim owns her own catering business. She continually monitors her other expense costs,…
A: Here we will talk about the instance of Hyewon Kim, who owns a catering business, Hyewon was advised…
Q: Suppose that you’re a finance major and upon graduation you want a job, preferably as a personal…
A: Rational decision-making is a multi-step procedure for creating rationally sound decisions.
Q: Jane Woodhurst is considering whether to buy one or two machines for a certain stage of the assembly…
A: Expected payoff = 325,000 Purchase 1 machine now and purchase the 2nd machine if demand is high.
Q: You really want to buy the product and yet you do not have enough money to buy that item. Luckily,…
A: Above question is answered below:
Q: c. Compute the expected value of perfect information. Do you think it would be worth trying to…
A: The expected value (EV), which is based on a random variable's probability distribution, describes…
Q: 1.) Because most equipment is not used on a project for an entire year, the costs must be converted…
A: 1. A project budget is the total projected costs needed to complete a project over a defined period…
Q: 1. Appraisal form 1004 can be used when reporting an appraisal on the following property types A)…
A: Appraisal form is considered to be one of the most commonly used forms in residential real estate…
Q: Three methods can be used for producing heat sensors for high-temperature furnaces. Method A will…
A: Apply fixed cost and breakeven point FC=Cost(A/P, interest rate, life)+ percentage salvage value…
Q: A company has a project to manufacture electrical pumps. The estimated cost for design and…
A: The following are provided : Cost of design = OMR 59200 Taxes = OMR 10000
A group of medical professionals is considering the construction of a private clinic. If the medical de-mand is high (i.e., there is a favorable market for the clinic), the physicians could realize a net profit of $100,000. If the market is not favorable, they could lose $40,000. Of course, they don’t have to proceed at all, in which case there is no cost. In the absence of any market data, the physicians’ best guess is that there is a 50–50 chance the clinic will be successful. Construct a decision tree to help analyze this problem. What should the medical professionals do?
Need to construction a Decision Tree using in Excel OM/QM, so if you could an use excel spreadsheet to solve, this would be idea
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- A group of doctors is considering the construction of a private clinic. IF the medical demand is high (favorable market for the clinic), the physicians could realize a profit of P1,000,000. If the market is not favorable, they could lose P400,000. If they don’t proceed at all, there is no cost. In the absence of any market research, the best the physician can guess is that there is a 50-50 chance the clinic will be successful. Required: Construct a decision tree to help analyze this problem. What should the doctors do?You are a risk manager of a school bus company in Hong Kong, your boss owns over 1,000 school buses. During COVID 19, almost all the school buses parked in no covered car park every day because students no need to be back to school. Your boss is considering a partial retention program for physical losses to the school buses. a) Identify the factors that your company should consider before it adopts a retention program for physical damage losses to school buses. b) If a retention program is adopted, what are the various methods you can use to pay for physical damage losses to school buses? c) Identify two risk-control measures that could be used in your company’s retention program for physical damage lossesBill Holliday isn't sure what he should do. He can build a four-apartment building, a two-apartment building, gather additional information, or simply do nothing. If he gathers additional information, the results could be favorable or unfavorable, but it would cost him $3,000 to gather it. Bill thinks there is a 50-50 chance that the information will be favorable. If the rental market is favorable, Bill will earn $15,000 with four apartments or $5,000 with two. He does not have the financial resources to pursue both options, but with an unfavorable rental market he would lose $20,000 with four apartments or $10,000 with two. Without gathering additional information, Bill estimates the probability of a favorable rental market to be 0.7. A favorable survey report would increase the probability of a favorable rental market to 0.9. Moreover, an unfavorable report of the additional information would decrease the probability of a favorable income market to 0.4. Of course, Bill can forget…
- #6) A group of medical professionals is considering constructing a private clinic. If a patient demand for the clinic is high, the physicians could realize a net profit of $120,000. If the demand is low, they could lose $55,000. Of course, they do not have to proceed at all, in which case there is no cost. In the absence of any market data, the best the physicians can guess is that there is a 50-50 chance the demand would be high. a) Create a decision tree. b) What should the medical professionals do? What is the payoff? c) The physicians have been approached by a market research firm that offers to perform a study of the market at a fee of $5,000. The market researchers claim that their experience enables them to use Bayes’ theorem to make the following statements of probability: -probability of high demand given a positive survey result = 0.82 -probability of low demand given a positive survey result = 0.18 -probability of high demand given a negative survey result = 0.11…The White Fish company is launching its new food for sale in supermarkets throughout Illinois. The sales department is convinced that its spicy fish dip will be a great success. The marketing department is considering an intensive advertising campaign. The advertising campaign will cost $1,900,000 and if successful (70% chance) produce $9,600,000 in added revenue. If the campaign is less successful (30% chance), the added revenue is estimated at only $4.200,000. If no advertising is used, the revenue is estimated at $6,500,000 if customers are receptive (with probability 0.75) and $3.200,000 with probability 0.25 if they are not receptive. a. Draw the associated decision tree. b. Roll Back Tree: Should White Fish invest in an intensive advertising campaign? c. Perform sensitivity analysis on probability of successful advertising campaign, which is now 0.7. Detemine the range of the probability of success for which the current decision is still the best choice. d. Perform sensitivity…The water pump company has succeeded in introducing a water pump that saves electricity, is easy to install, and is durable (guaranteed). Its high quality has given the company an early edge in the local and national markets, but the entry of highly skilled competitors may occur within the next 3 years. Assume that the income and expense relationship of the company is as follows: TR = 22000Q - 15.6Q2 MR = dTR / dQ = 22000 - 31.2Q TC = 300000 + 4640Q + 10Q2 MC = dTC / dQ = 4640 + 20Q Where TR is income (in thousands of rupiah), Q is quantity (in units), MR is marginal income (in thousands of rupiah), TC is total cost, including a risk-adjusted normal rate of return on investment (in thousands of rupiah), and MC is the marginal cost (in thousands of rupiah). a. Compute: the profit-maximizing price-output combination. b. Compute: long-run equilibrium high-price / low-output. c. Compute: long-run low-price / high-output equilibrium
- Organizing a Risk Analysis. You are the director of internal auditing of a large municipal hospital. You receive monthly financial reports prepared by the accounting department, and your review of them has shown that total accounts receivable from patients has steadily and rapidly increased over the past eight months.Other information in the reports shows the following conditions:a. The number of available hospital beds has not changed.b. The bed occupancy rate has not changed.c. Hospital billing rates have not changed significantly.d. The hospitalization insurance contracts have not changed since the last modification 12 months ago.Your internal audit department audited the accounts receivable 10 months ago. The audit file for that assignment contains financial information, a record of the risk analysis, documentation of the study and evaluation of management and internal risk mitigation controls, documentation of the evidence-gathering procedures used to produce evidence about the…Sun TV sells TV sets. It does not sell smart TVs so customers do not come to Sun TV if they want to purchase smart TVs. Sun TV wants to start selling smart TVs and will only sell smart TVs to customers to whom they advertise. Managers use customer information (income level, previous purchase history) to decide which customers they should target. The team needs to decide how sure it must be in predicting customer interest in a smart TV. If it is too cautious, it will choose a very high cutoff probability and only market to customers who it believes are very likely to be in the market for a smart TV. This may cause them to miss out on many customers. If they are too aggressive and choose a low cutoff probability, they may identify more individuals interested in buying smart TVs but also end up wasting marketing dollars on customers who are not interested in purchasing smart TVs. To choose a cutoff probability, the team develops the confusion matrices below for two cutoff probabilities on…You're working with a buyer who wants to make an offer on a house. You check the Flood Insurance Rate Maps and see that the property is located in a V Zone. What should you tell the buyer? This coastal property is not considered a high- risk category on the FIRM maps, so insurance is not required. The property is in a special flood hazard area, and flood insurance will be required if the buyer intends to use a federally insured or regulated lender. The property is in a 100-year flood plain, so flood insurance is encouraged but not required by lenders. The property is considered to be very valuable and is likely to increase in value in the near future.
- 4. "Family Man," a construction company, is considering whether to bid on a contract for a new housing complex. The cost of preparing a bid USD 200,000. “Family Man" has a 0.8 probability of winning the contract, if it submits the bid. If "Family Man" wins the bid, it has to pay USD 2000,000 to be a project partner of the project. As per the usual practice, "Family Man" will then consider consulting a market research firm "Marquess" to conduct a market survey to forecast the demand of housing complex before beginning the construction. "Marquess" charges a fee of USD 150,000. Now, the demand scenario can be either "High demand" or "Low demand." "Family Man" gets a revenue of USD 5000,000 and USD 3000,000 in case of "High demand" and "Low demand" scenario, respectively. On the other hand, instead of construction, "Family Man" has a provision of selling its project rights to another project partner construction company at the price USD 3500,000. As per the historical data, "Marquess"…Suppose that you’re a finance major and upon graduation you want a job, preferably as a personal financial planner, with a minimum salary of Rs 1,50,000 and within a hundred miles of your hometown. You accept a job offer as a business credit analyst—not exactly a personal financial planner but still in the finance field—at a bank 50 miles from home at a starting salary of Rs 1,20,000. If you had done a more comprehensive job search, you would have discovered a job in personal financial planning at a trust company only 25 miles from your hometown and starting at a salary of Rs 1,60,000. Were you a perfectly rational decision maker in this case? Why or why not? Explain.c) Koki Nkoana is a writer of romance novels. A movie company and a TV network both want exclusive rights to one of her more popular works. If she signs with the network, she will receive a single lump sum, but if she signs with the movie company, the amount she will receive depends on the market response to her movie. Table 3 presents the payoff matrix (in '000) for Jenny Lind. Table 3: Profit matrix States of Nature Small Box Medium Box Large Box Decisions Office Office Office Sign with Movie Company R200 R1000 3000 Sign with TV Network R900 R900 R900 Prior Probabilities 0.3 0.6 0.1 Applying the decision tree algorithm, determine and advice Koki Nkoana on the best decision to make?