1. Assuming Mr. Jaeger chooses to harvest the grapes before the storm arrives, how much money will he make?
If Mr. Jaeger chooses to harvest immediately, he will eliminate the risk, but the quality of wine will be lower than the normal. It results that the price of a bottle of wine will be $2.85, but the quantity of bottled produced will not be changed. The quantity will be 12,000 (1,000 *12=12,000) bottles of wine. Therefore, the revenue he will make will be $34,200 ($2.85*12,000=$34,200)

2. Assuming Mr. Jaeger chooses to wait to harvest the grapes, what is the probability that the grapes will end up with the botrytis mold, and how much money will he make if that occurs?
There is a 40% chance that it would lead to the development of the botrytis mold, if the storm did strike. Moreover, the probability of storm would hit the Napa Valley is 50%. Therefore, the probability that the grapes will end up with the botrytis mold is 20%. The wholesale price for a botrytised Riesling will be $8 per bottle, however the quantity will be decreased by 30%, which is 84,000 (12,000*70%). The revenue will be $67,200 (84,000*8=$67,200).

3. Taking into account all of the various possibilities, what should Mr. Jaeger do?
Mr. Jaeger should harvest later. Since we do not exactly know how selling thin wine will damage the winery’s reputation, we cannot figure out how much revenues will be decreased if Mr. Jaeger sells thin wine this year. Therefore, Mr. Jaeger should sell the wine in bottle when the rainwater occurred, if he only considered the revenue in this year. According to the Decision Tree, the revenue he will make is $39,744, if he harvest later and sell wine in bottle when the rainwater occurred.

4. How much should be willing to pay to learn whether the storm will really hit Napa?
The Decision tree shows that the expected value is $42,288 if the storm hits