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Consider the decision tree we constructed for IDEA in Session 1 of week 4. Assume that all of the data used in the example – including the 0.5 probability that the market is strong – remain the same as in Session 1, except for the fixed upfront cost charged by Supplier S. Suppose that, instead of a fixed upfront cost of 0€, Supplier S charges IDEA a fixed upfront cost of 175,000€.
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In the example in Question 1, what is the retailer’s “mark up” (rounded to the nearest whole percentage)?
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