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Suppose your organization is using a legacy software (i.e. older version of a software). Some influential stakeholders believe that by upgrading this software your organization can save millions, while others

feel that staying with the legacy software is the safest option, even though it is not meeting the current company needs. The stakeholders supporting the upgrade of the software are further split into two factions: those that support buying the new software and those that support building the new software in-house.In this scenario, you can either: Build the new software: To build the new software, the associated cost is$500,000. Buy the new software: To buy the new software, the associated cost is$750,000. • Stay with the legacy software: If the company decides to stay with the legacy software, the associated cost is mainly maintenance and will amount to $100,000. The Buy the New Software and Build the New Software options will lead to either a successful deployment or an unsuccessful one. If the deployment is successful then the impact is zero, because the risk will not have materialized.However, if the deployment is unsuccessful, then the risk will materialize and the impact is $2 million. The Stay with the Legacy Software option will lead to only one impact, which is $2 million, because the legacy software is not currently meeting the needs of the company. There is a 40% chance that the Build the New Software option will lead to an unsuccessful deployment and a5% chance that the Buy the New Software option will lead to an unsuccessful deployment. Construct a decision tree and determine which option should be selected based on its expected monetary value.

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