Decision Tree and Value of Information for DCG – Assignment Help

Assignment Overview

Scenario: You are a consultant who works for the Diligent Consulting Group. You have learned about three different investment opportunities and need to decide which one is most lucrative. Following are the three investment options and their probabilities:

Option A: Real Estate development. This is a risky opportunity with the possibility of a high payoff, but also with no payoff at all. You have reviewed all of the possible data for the outcomes in the next 10 years and these are your estimates of the cash payoff and probabilities:

Required initial investment: $0.75 million

High NPV: $5 million, Pr = 0.5

Medium NPV: $2 million, Pr = 0.3

Low NPV: $0, Pr = 0.2

Option B: Retail franchise for Just Hats, a boutique-type store selling fashion hats for men and women. This also is a risky opportunity but less so than Option A. It has the potential for less risk of failure, but also a lower payoff. You have reviewed all of the possible data for the outcomes in the next 10 years and these are your estimates of the payoffs and probabilities:

Required initial investment: $0.55 million

High NPV: $3 million, Pr = 0.75

Medium NPV: $2 million, Pr = 0.15

Low NPV: $1 million, Pr = 0.1

Option C: High Yield Municipal Bonds. This option has low risk and is assumed to be a Certainty. So there is only one outcome with probability of 1.0:

Required initial investment: $0.75 million

NPV: $1.5 million, Pr = 1.0

Case Assignment

Develop an analysis of these three investments, and determine which of them you should choose. Be sure to account for cash paid for each of the three alternatives. If you do not recall how to do this, review the practice exercises in the Background page. Do your analysis in Excel using the Decision Tree add-in or SmartArt graphic, as suggested in the Background page. Write a report to your private investment company and explain your analysis and your recommendations. Provide a rationale for your decision.

Assignment Expectations

Excel Analysis: Conduct accurate and complete Excel analysis using decision tree add-in.

Written Report: Length requirements: 2–3 pages minimum (not including Cover and Reference pages)

Provide a brief introduction to/background of the problem. Written analysis that supports Excel analysis and provides thorough discussion of assumptions, rationale, and logic used.

Complete, meaningful, and accurate recommendation(s).

Write clearly, simply, and logically. Use double-spaced, black Verdana or Times Roman font in 12 pt. type size.

Have an introduction at the beginning to introduce the topics and use keywords as headings to organize the report.

Avoid redundancy and general statements such as “All organizations exist to make a profit.” Make every sentence count.

Paraphrase the facts using your own words and ideas, employing quotes sparingly. Quotes, if absolutely necessary, should rarely exceed five words.

The post Decision Tree and Value of Information for DCG appeared first on ESSAY PAPER.


Decision Tree and Value of Information for DCG was first posted on February 19, 2021 at 3:24 am.
©2019 "ESSAY PAPER". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at ALL ANSWERS

Place your order
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more