FINANCIAL MODELLING a LOGICAL MEANS of EVALUATING TREE Form

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hello everyone in this video we are going to be discussing decision tree analysis we're going to be talking about the introduction as well as working through an example in order to hit home the core concepts and so what i have here is a word problem that describes a typical situation that we might encounter in industry we have to choose whether or not to invest in product a or product b and so as we're reading through the problem statement here or the scenario what we're going to be picking out is that if we go with the route of product a we're going to spend 300 bucks to develop it but our risk analysis have told us that there's a 60 chance that it's going to generate 700 bucks for our company but a 40 chance that it will lose us 100 and so that's product a if we go with the path of product b which i'll use a blue ink to use if we go with product b we're going to spend 500 to develop it but our risk analysis or analysts have told us that there's a 70 chance of a of it making us 900 bu