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Decision tree

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2. Shown (attached) is a decision tree describing an expansion decision.

a. Are "sales" independent of the expansion decision? Why or why not?

b. Are "costs" independent of the expansion decision? Why or why not?

c. Are "costs" independent of "sales?" Why or why not?

d. Are revenues independent of the expansion decision? Why or why not?

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The solution answers a lot of questions based on the decision tree. Overall, an excellent response to the question being asked.

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a. Are "sales" independent of the expansion decision? Why or why not?
Answer: Sales are not independent of the expansion decision. This is because the probability of high/low sales differ based on the decision to expand or not expand. If we expand the probability of high sales is 0.5 and if we do not expand then the probability ...

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