A, B, and c please!

5. (15 marks total) Avalon Industrials is proposing to introduce one of three items to their product line, (Royale, Luxor and Special). The profits for each of these will depend on market conditions, which may be favourable, stable or unfavourable, with probablilities and the resulting payoffs given in the table below. Product Favourable (0.2) Stable (0.7) Unfavourable (0.1) Royale $120,000 $70,000 -$30,000 Luxor 60,000 40,000 20,000 Special 35,000 30,000 30,000 (a) Draw a decision tree which describes this situation and use it to determine a recommendation for the business. (b) How much would the company be willing to pay for market reseach to gain better information about future market conditions? (c) The company is considering contracting a market research firm to examine future market conditions. The results will indicate either positive or negative conditions. There is a 0.60 probability of a positive report, given favourable conditions; a 0.30 probability of a positive report given stable conditions; and a 0.10 probability of a positive report given unfavourable conditions. There is a 0.60 probability of a positive report, given favourable conditions; a 0.30 probability of a positive report given stable conditions; and a 0.10 probability of a positive report given unfavourable conditions. Using either a decision tree or posterior probability tables, determine the strategy that the company should follow, and the expected value of the strategy