5. Based on the payoff table given below (where payoffs are measured in dollars $), construct...

 

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5. Based on the payoff table given below (where payoffs are measured in dollars $), construct a decision tree, and calculate expected values. What is the best alternative? (15 points) Alternative State of Nature Good Market ($) Average Market ($) Poor Market ($) Construct a 75,000 25,000 -40,000 small plant Construct a 100,000 35,000 -60,000 large plant Do Nothing 0 0 0 Probabilities 0.25 0.5 0.25 5. Based on the payoff table given below (where payoffs are measured in dollars $), construct a decision tree, and calculate expected values. What is the best alternative? (15 points) Alternative State of Nature Good Market ($) Average Market ($) Poor Market ($) Construct a 75,000 25,000 -40,000 small plant Construct a 100,000 35,000 -60,000 large plant Do Nothing 0 0 0 Probabilities 0.25 0.5 0.25