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Mathematics, 08.10.2020 03:01 pr47723

$80,000, and if it is installed, no losses from this type of incident will be incurred. However, if the generator is not installed, there is a 12% chance that a power outage will occur during a year. If there is an outage, there is a .07 probability that the resulting losses will be very large, or approximately $7 million in net aggregated loss. Alternatively, it is estimated that there is a .93 probability of only slight losses of around $1 million. Using decision tree analysis, determine whether the SPEA should have install the new power generator. What considerations may change your decision?

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$80,000, and if it is installed, no losses from this type of incident will be incurred. However, if...
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