Each university has strong and weak points and the demand for MBA graduates is uncertain. The availability of jobs, student loans, and financial support will have a significant impact on Yuxuan's ultimate decision. UPM and UM have comparatively high tuition, which would necessitate Yuxuan take out student loans resulting in possibly substantial student loan debt. In a tight market, degrees with that cachet might spell the difference between a hefty paycheck and a piddling unemployment check. USM and UKM hold the advantage of comparatively low tuition but a more regional appeal in a tight job market. Yuxuan gathers his advisory council of Kip and Pedro to assist with the decision. Together they forecast three possible scenarios for the job market and institutional success and predict annual cash flows associated with an MBA from each institution. All cash flows in the table are in thousands of dollars.
a. Draw a decision tree for the problem above.
b. Kip tends to be extremely optimistic. Which decision making criterion would he naturally select and what conclusion would he recommend to Yuxuan? Why?
