Decision Tree Activity:
Miss Rachelle is filing a case against the manufacturer of her car because of a defect that she
believes caused her to have an accident and kept her out of work for a year. She is suing the
company for Php3.5 million. The company has offered her a settlement of Php700,000, of which
Miss Felicitas would receive Php600,000 after attorneys’ fees.
Her attorney has advised her that she has a 50% chance of winning her case. If she loses, she will
incur attorneys’ fees and court costs of Php75,000. If she wins, she is not guaranteed her full
requested settlement. Her attorney believes that there is a 50% chance she could receive the full
settlement, in which case Miss Rachelle would get Php2 million after her attorney takes his cut,
and a 50% chance that the jury will award her a lesser amount of Php1,000,000, of which Miss
Rachelle would get Php500,000. Using decision-tree analysis, decide if Miss Rachelle should sue
the manufacturer.
You can use excel or you can just do it manually through word or you can use pen and paper.