Table 5 is all about the expected opportunity loss, so dito, if dave chooses to sell the units within

60 days at the amount of 739 000 or at low price, instead of selling it at 779 000 or the highest
price, he will get an expected loss of 40 000, so ang operation natin dito is subtraction. Same
goes to selling the units within 90 days, he will also get a 40 000 expected loss kase nga diba
725,800.00 – 765,800.00 negative 40 000 or loss ang ating makukuha. How ever, 20 000
naman yung magiging loss ni dave if binenta nya yung units for a moderate price or 759 000
imbes na sa pinaka mataas na price or 779 000. Also here, as you can see, considering the 60
and 90 days na time frame, same lang na 40 000 ang makukuhang loss kapag mas pinili nyang
ibenta ito at a low price and 20 000 yung macocompute na expected loss pag binenta nya ito at
a moderate price.

Aside from payoff tables, our group also uses a decision tree which visually outlines the
potential outcomes or cost of a complex decision. This decision tree is particularly helpful
because it helps us come up with the best decision. To interpret this, let's take a look at the
decision nodes. Dave has to decide if he will decline or accept the offer of Aztec Savings and
loan Association. Accepting the offer means taking or purchasing the 3 units being offered. Then
as you can see the numbers 4, 5 and 6, those are the decision probabilities. For Unit 1, there is
a 70% chance that it will be sold by Dave within 60 days, and a 30% chance naman na
mabebenta ito within 90 days. And yung selling price para sa unit 1 is 269 000. Then for unit 2
naman is 25% chance of $250,000; 50% chance of $260,000; and 25% of $270,000. At para
naman sa pang huli o pangatlong unit, 30% chance na ang selling price is $250,000; 40% of
$260,000; and 30% chance of $270,000. Then the last part of the decision tree are the denoting
outcomes, so itong mga ito is makikita natin dun sa table 1 or the table for expected revenue
from each unit na explain ni Gaela. For example sa unit 1 may 70% chance na mabebenta
within 60 days, 259 000 yung magiging outcome or profit kase ibabawas pa yung 10 000 na
selling cost sa 269 000. Bale dun sa 30% chance na mabebenta within 90 days, may 4 400 pa
na ibabawas. Then same process lang din para dun sa iba pang unit unit.