I have included a picture of the question as well as my solution. for some reaso

Question

I have included a picture of the question as well as my solution. for some reason it isn't working and I don't know why

Chapter 13, Problem 043 DZ Your answer is partially correct. Try again Your company is trying to decide whether to buy or lease snow-removal equipment. You have gathered all the relevant cost data and converted them to equivalent uniform annual costs (EUACs), as shown in the table below. The complicating factor in your evaluation is that the need for the snow-removal equipment might be heavy or light. You estimate that there is a 60 percent probability of heavy use and a 40 percent probability of light use. Need Lease Buy Light $2,750 $2,850 Heavy $3,575 $4,200 Using a decision tree analysis, determine whether the new snow-removal equipment should be leased or bought. Lease Please show the Pw values used to make your decision: Lease: Buy: 100%

Explanation / Answer

0.6 for light

0.4 for heavy

hence

for lease

= 0.6*2750 +0.4*3575 = 3080

for buy

=0.6* 2850 + 0.4* 4200 =3390

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