A) Large or Small

B) as Shown

C) value?

Chary Drah Retales, Inc., must decide whather to build a smallers barge fatty as a new location in Fairtar Demand at the location will the below or high, with probar 0.4 and 0.6spectively, Cheryl builds a small facity and demand prove to be high, she then has the option of expanding the facility is a city is buit and domard proves to be hign, and then the retailer expands the fact the part is $240,000. If a small facity is built and demand prove to be high, but Cheryl to decide not to expand the facily, the payoff ia $219,000 a smal facility is buit and demand proves to be low, then there is no option to expand and se payoff in $210,000, a large facility built and comand prove to be low, Cheryl than has the option of stmulating demand through local advertsing. I she does not exercise this option, en the payoff is $45,000. if she does exercise the acvarising option, then the response to advertising will either be modest or sizable, with probabilities of 0.4 and 0.6. roapectively. If the response a modest, the payoff $40,00. Ila sizabila, the payoff is $240,000. Fraly, a large facility is built and comand prove to be high, then no advertising is needed and the pay att is $900.000 a) What should Cheryl do ta mange her expected payot a) Choose the correct decision tree below. Note that all payoffs are in $1,000 OA. OB Q Q -210 low (0) -210 low (074 expand 2 -240 2 -240 high 0.6 lege high 0.6 don't expand -243 don't -213 modest (0.4) 1 modest 10.41 40 at 10.4140 advertis-240 adverte 240 large low (0.4) mal low (0.4 13 45 dort advertise dont advertise . 45 high 0.61 900 High (0.6) -300 0 OC OD 0. Q 210 low (0.4) Low (0.6 -210 expand al al 2 high cost Don't expand 213 13 model 0.640 1 expand -240 high 10.67 dontext 213 modest (0.4) 40 advertise 240 OH w (4) 3 dort advertise 45 + 40 advertise 240 large large low 14 45 don't advertise High 100) 900 high (0.6) 000 to stimulate demand Chery should buldnech in demand proves below. Then b) What is the value of this expected peyoff? The expected payofs sound your response to the nearester no advertising readed advertise