# AP2 Decision Tree Assignment Summer 2014

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Play now? Play later?
You can become a millionaire! That’s what the junk mail said. But then there was the fine print:

If you send in your entry before midnight tonight, then here are your chances:
0.1% that you win \$1,000,000
75% that you win nothing
Otherwise, you must PAY \$1,000

But wait, there’s more! If you don’t win the million AND you don’t have to pay on your first attempt, then you can choose to play one more time. If you choose to play again, then here are your chances:
2% that you win \$100,000
20% that you win \$500
Otherwise, you must PAY \$2,000

What is your expected outcome for attempting this venture? Solve this problem using a decision tree and clearly show all calculations and the expected monetary value at each node.
Use maximization of expected value as your decision criterion.