The mobile oil company has recently acquired oil rights to a new potential source of natural oil in alaska. the current market value of these rights is $90,000. if there is natural oil at the site, it is estimated to be worth $800,000; however, the company would have to pay $100,000 in drilling costs to extract the oil. the company believes there is a 0.25 probability that the proposed drilling site actually would hit the natural oil reserve. alternatively, the company can pay $30,000 to first carry out a seismic survey at the proposed drilling site. the probability of a favorable seismic survey when oil is present at the drilling site is 0.6. the probability of an unfavorable seismic survey when no oil is present is 0.80.

a) what is the probability of a favorable seismic survey? round your answer to two decimal places.
b) what is the probability of an unfavorable seismic survey? c) construct a decision tree for this problemd) what is the optimal decision strategy using the emv criterion? e) to which financial estimate in the decision tree is the emv most sensitive

Georgia orchards produced a good crop of peaches this year. after preparing the following income statement, the company is concerned about the net loss on its no. 3 peaches. georgia orchards income statement for year ended december 31, 2017 no. 1 no. 2 no. 3 combined sales (by grade) no. 1: 300,000 ibs. @ $1.50/lb $ 450,000 no. 2: 300,000 ibs. @ $1.00/lb $ 300,000 no. 3: 750,000 ibs. @ $0.25/lb $ 187,500 total sales $ 937,500 costs tree pruning and care @ $0.30/ib 90,000 90,000 225,000 405,000 picking, sorting, and grading @ $0.15/ib 45,000 45,000 112,500 202,500 delivery costs 15,000 15,000 37,500 67,500 total costs 150,000 150,000 375,000 675,000 net income (loss) $ 300,000 $ 150,000 $ (187,500 ) $ 262,500 in preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. the company’s delivery cost records show that $30,000 of the $67,500 relates to crating the no. 1 and no. 2 peaches and hauling them to the buyer. the remaining $37,500 of delivery costs is for crating the no. 3 peaches and hauling them to the cannery. required: 1. prepare reports showing cost allocations on a sales value basis to the three grades of peaches. separate the delivery costs into the amounts directly identifiable with each grade. then allocate any shared delivery costs on the basis of the relative sales value of each grade. (do not round intermediate calculations.)