During their spare time in college, Anders and Michael have developed software to regulate traffic on internet sites. Their product is very original and they have applied for a patent. They estimate that there is an 80% chance of their patent being approved. Last week Anders and Michael have presented their ideas to Singular Inc., the dominant player in this market after Singular had signed a confidentiality agreement with Anders and Michael. Yesterday Singular announced a new software product that looks suspiciously similar to the software that Anders and Michael have developed. Anders suggested to sue Singular immediately but Michael felt they should wait until they receive notification of their patent.

Michael reasoned that their case will be much stronger if they had a patent on the product. Suppose that Anders and Michael have a 90% chance of winning a lawsuit against Singular if their patent is approved and they have a 60% chance of winning a lawsuit while their patent is still pending.

Using a decision tree decide what Anders and Michael should do to maximize the expected profits.
Singular informally makes a now-or-ever offer to buy Anders' and Michael's software for $ 500000. Should Anders and Michael agree to this offer