[puifoong]

Hi can someone tell me if I am right about the EV calculations. I didnt quite follow the question so this is what I did:
I assumed if the expansion’s carried out and the operational cost is $120, one of the two scenarios can happen which is when number of members stays the same or increase to 6500, and the respective payoff was [6000 x ($720 – $120) x3 ] and [6500 x ($720 – $180) x 3], the EV at this node is to simply multiply these two payoffs with their respective probability (0.4 or 0.6). And the same goes for when the operational cost is $180.

And what could the perfect information be?? Sorry for the long post I know you guys would probably hate essays right now =p

[puifoong]

Hi can anyone describe how does the tree look like?
I am still very confused right now =(((

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