Free Preparation Discussions
MENU
CIMA Exam CIMAPRO19-P01-1 Topic 5 Question 95 Discussion
Topic #: 5
A university is trying to decide whether or not to advertise a new post-graduate degree programme. The number of students starting the programme is dependent on economic conditions. If conditions are poor, it is expected that the programme will attract 40 students without advertising. There is a 60% chance that economic conditions will be poor. If economic conditions are good it is expected that the programme will attract only 20 students without advertising. There is a 40% chance that economic conditions will be good.
If the programme is advertised and economic conditions are poor, there is a 65% chance that the advertising will stimulate further demand and student numbers will increase to 50. If economic conditions are good, there is a 25% chance the advertising will stimulate further demand and numbers will increase to 25 students.
The profit expected, before deducting the cost of advertising, at different levels of student numbers are as follows:
The cost of advertising the programme will be $15,000.
Required:
Demonstrate, using a decision tree, whether the programme should be advertised.
References:
Amie
2 months agoJodi
1 months agoHerschel
2 months agoJennifer
2 months agoBenton
2 months agoFreeman
2 months agoHolley
3 months agoDarell
2 months agoKiley
2 months agoIola
2 months agoLeonie
3 months agoLeota
3 months agoJohna
2 months agoMila
2 months agoMagdalene
2 months agoJosefa
2 months agoMarguerita
3 months agoSharan
3 months agoLizette
3 months agoRory
4 months agoBenedict
3 months agoReiko
3 months agoAlishia
3 months agoLashandra
3 months ago