The Maxwell School
Syracuse University
Syracuse University
An agency is considering an upgrade (U) to its antiquated computer system. The upgrade would cost $20 million but it only has an 80% chance of succeeding. If it succeeds (S), it will produce $40 million of benefits. However, if it fails (F) it will produce $0 benefits. A consulting firm has offered to carry out a study for $2 million that would determine whether or not the upgrade would succeed before the agency undertakes it. Please determine whether or not the agency should hire the consultant (C). You may assume that the consulting firm is infallible.
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