a 5000 b 5200 c 5400 d 5800 e 7000

A manager needs to decide how many additional machines to buy to cope with a possible increase of demand. In order to maximize profit, the manager has three alternatives to choose from before the demand state (high or low) is realized: buy two additional machines, buy one additional machine, or subcontract. If only or additional machine is purchased and demand turns out to be high, the manager then chooses from three subsequent options: purchase one more machine, use overtime, or to do nothing. The following decision tree provides the profit (in dollars) obtained in each possible scenario. Do nothing Subcontract Overtime $6,000 Hich 1 machine Low 2 machines 1 more machine $7,000 High Low Probablity low demand (0.4); high demand (0.6) What is the expected net profit with the best initial decision