Romo Associates, Inc., a property development firm, purchased an old house near the town square in Concord Falls, where State University is located. The old house was built in the mid-1800s, and Romo Associates restored it. For almost a decade, Romo has leased it to the university for academic office space. The house is located on a wide lawn and has become a town landmark.
However, in 2008, the lease with the university expired, and Romo Associates decided to build high- density student apartments on the site, using all the open space. The community was outraged and objected to the town council. The legal counsel for the town spoke with a representative from Romo and hinted that if Romo requested a permit, the town would probably reject it. Romo had reviewed the town building code and felt confident that its plan was within the guidelines, but that did not necessarily mean that it could win a lawsuit against the town to force the town to grant a permit.
The principals at Romo Associates held a series of meetings to review their alternatives. They decided that they had three options: They could request the permit, they could sell the property, or they could request a permit for a low- density office building, which the town had indicated it would not fight. Regarding the last two options, if Romo sells the house and property, it thinks it can get $900,000. If it builds a new office building, its return will depend on town business growth in the future. It feels that there is a 70% chance of future growth, in which case Romo will see a return of $ 1.3 million ( over a 10- year planning horizon); if no growth ( or erosion) occurs, it will make only $200,000.
If Romo requests a permit for the apartments, a host of good and bad outcomes are possible. The immediate good outcome is approval of its permit, which it estimates will result in a return of $ 3 million. However, Romo gives that result only a 10% chance that it will occur. Alternatively, Romo thinks there is a 90% chance that the town will reject its application, which will result in another set of decisions.
Romo can sell the property at that point. However, the rejection of the permit will undoubtedly decrease the value to potential buyers, and Romo estimates that it will get only $700,000. Alternatively, it can construct the office building and face the same potential outcomes it did earlier, namely, a 30% chance of no town growth and a $200,000 return or a 70% chance of growth with a return of $1.3 million. A third option is to sue the town. On the surface, Romo’s case looks good, but the town building code is vague, and a sympathetic judge could throw out its suit. Whether or not it wins, Romo estimates its possible legal fees to be $300,000, and it feels it has only a 40% chance of winning. However, if Romo does win, it estimates that the award will be approximately $1 million, and it will also get its $3 million return for building the apartments. Romo also estimates that there is a 10% chance that the suit could linger on in the courts for such a long time that any future return would be negated during its planning horizon, and it would incur an additional $200,000 in legal fees.
If Romo loses the suit, it will then be faced with the same options of selling the property or constructing an office building. However, if the suit is carried this far into the future, it feels that the selling price it can ask will be somewhat dependent on the town’s growth prospects at that time, which it feels it can estimate at only 50- 50. If the town is in a growth mode that far in the future, Romo thinks that $900,000 is a conservative estimate of the potential sale price, whereas if the town is not growing, it thinks $500,000 is a more likely estimate. Finally, if Romo constructs the office building, it feels that the chance of town growth is 50%, in which case the return will be only $1.2 million. If no growth occurs, it conservatively estimates only a $100,000 return.
A. Perform a decision tree analysis of Romo Associates’ decision situation, using expected value, and indicate the appropriate decision with these criteria. Build your Decision Tree using the Decision Tree tools in Risk Solver.
B. Indicate the decision you would make and explain your reasons.

My MasterPapers
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Us

Outstanding Academic Writing Service

At, you are assured of professional essay writing help from the leading experts online. Quality comes at the forefront of our custom writing service to ensure that all our customers are satisfied with the work delivered. We value repeat customers. For this reason, we ensure that each task is completed to perfection for high scores.

Top Writers

Our hiring process is highly intensive. The writers are exposed to a strict selection procedure before hiring to ensure that we acquire the most qualified, well-educated and experienced writers. Our team of writers, professors, editors and researchers will ensure that you get incredible results.

Plagiarism-Free Papers

We highly discourage plagiarism. For this reason, we have trained our writers in such a way that all the papers are written from scratch and are free from plagiarism. We also pay attention to ensure that each paper is completed as per the instructions provided. Referencing and citations are done as per the paper format selected by the customer. These include: APA, MLA, Chicago, Harvard, Turabian among others.

24/7 Customer Support

You can contact our support team via the chat window at the bottom right corner. Alternatively, feel free to email us via our support email: Our team is available 24/7 to respond to your queries and guide you though where need be.

Swift Delivery & 100% Money Back Guarantee

Simply choose the desired deadline when placing the order. The task is assigned to the most qualified writer as soon as the order is successfully placed. All the papers are delivered to you within the deadline selected. In case a paper cannot be delivered within the deadline selected, we request for a deadline extension within the shortest time possible.

Free Unlimited Revisions

Our customers can always request for a revision in case they feel that something needs to be added or changed after the final paper has been delivered. We do not charge for revisions. However, we highly discourage our customers from misusing this policy.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services specializes in custom essay writing for all level of students. Simply relax as we get your paper done within the timeline indicated.


Academic Help Service

Our team of skilled writers and researchers is readily available to get any type of academic paper completed. We deliver high quality papers and projects to our customers to ensure that we maintain a long-term relationship that will shine your academic career.


Admission Essays & Professional Writing

An admission essay allows you to express yourself by providing personal details that wouldn’t have fit on other areas of an application. We have a team of experienced writers who will get you to the desired academic level through a professional and a personalized admission essay.


Editing & proofreading

Are you seeking for editing or proofreading help? We have a team of editors who will ensure that any issue within you paper has been addressed. Upload the paper to be cleaned up and relax as we get the job done.


Revision Support

At, you can always ask for revision in case you want some changes in you paper. We focus on ensuring that the grammar, research and formatting are done as per the latest academic writing standards.