An employee has to decide among four machines; the purchase and installation cost is the same for all. The decision tree indicates that Machine D is optimal. Which machine should be chosen?

• A. Machine A
• B. Machine B
• C. Machine C
• D. Machine D

Answer: (D)

When upfront costs are the same, the best choice comes down to which option yields the highest expected value given future outcomes. The decision tree shows the future costs and benefits for each machine across different scenarios, so the machine that reaches the greatest expected net benefit (or the lowest expected total cost) is the one to pick. In this case, the tree identifies a specific machine as the most favorable when these future uncertainties are taken into account. That machine should be chosen because it produces the best overall value across the possible future conditions. The other machines would lead to lower expected value under the same scenarios, so they’re not as favorable.