case study 2621

The westhouser company in the state of Washington cureently has an option to purchase a piece of land with good timber forst on it. It is now May 1, and the current price of the land is $2.2 million. Westhouser does not actually need the timber from this land until the beginning of July , but is top executives fear that another company might buy the land between now and the beginning of July. They asses that there is a 5% chance that a compeititor will buy the land during May. If this does not occur, they assess that there is a 10% chance that the competitor will buy the land during June. If Westhouser does not take advanate of its current option, it can attempt to buy the land at the beginning of June or the beginning of July, provieed that it is still available. Westhousers incentive for delaying the purchase is that its fianncial experts believe there is a good chance that the price of the land will fall significantlyt in one or both of the next two months. they assess the possible price decreases and their porbabilities in Table 6.2 and Table 6.3. table 6.2 shows the probabilities pf the possible decrease during May. Table 6.3 lists the conditional probabilties of the possible price decrease in June, given the price decrease in May. For example, it indicates that if the price decrease in May is $60,000, then the possible price decrease in June are $0, $30,000, and $60,000 with respective probabilities 0.6, 0.2, and 0.2. If Wetshouser purchases the land, it believes that it can gross $3 million (This does not count the cost of pruchasing the land.) But if it does not purchase the land, Westhouser believes that it can make $650,000 from alternative investments. What shuld the company do?
Create a decision tree and any other charts and graphs to support your report
4-5 pages APA formatted paper
Tables are attached in the image
less than 15% plagiarism
Must include a strong abstract, introduction and conclusion (all 3 different from each other)
Citations and references must be included

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