Question: A company must decide whether to develop a field that might have natural gas deposits. Before making this decision, the company can perform a soundings

A company must decide whether to develop a field that might have natural gas deposits. Before making this decision, the company can perform a soundings test for $90,000, and this test will either indicate that gas is present or that it isn't. However, the test isn't perfect. The following decision tree, all correct, has been developed. Assuming that the company is an EMV maximizer, which of the following is the most the company would pay for the soundings test, i.e., what is EVI?

a. $90,000

b. $10,800

c. $0

d. $79,200

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