A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being , , and , respectively. A small facility is expected to earn an after-tax net present value of just if demand is low. If demand is average, the small facility is expected to earn ; it can be increased to medium size to earn a net present value of . If demand is high, the small facility is expected to earn and can be expanded to medium size to earn or to large size to earn . A medium-sized facility is expected to lose an estimated if demand is low and earn if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of ; it can be expanded to a large size for a net payoff of . If a large facility is built and demand is high, earnings are expected to be . If demand is average for the large facility, the present value is expected to be ; if demand is low, the facility is expected to lose . Part 2 Choose the correct decision tree below. Note that each payoff is given in thousands ($000). A. 1 2 3 4 In the diagram, 4 squares, 3 circles, and line segments connecting the squares and circles to form a decision tree are drawn. The starting point is the leftmost square labeled 1. From this square, three lines emerge to the right and each extends to a distinct branch point indicated by unlabeled circles. The upper path is labeled Large, the middle path is labeled Medium, and the lower path is labeled Small. From each of the circles, three branches continue to the right. From top to bottom, the first, the fourth, and the seventh line indicate the High path for that branch with a value of 0.35. The second, the fifth, and the eighth line indicate the Average path for that branch with a value of 0.40. The third, the sixth, and the ninth line indicate the Low path for that branch with a value of 0.25. At the end of Large High path, a square labeled 2 is drawn with 2 further branches to the right. At the end of Large Average path, a value of $ 125 is displayed. At the end of Large Low path, a value of negative $ 40 is displayed. At the end of Medium High path, a value of $ 180 is displayed. At the end of Medium Average path, a value of $ 130 is displayed. At the end of Medium Low path, a value of negative $ 25 is displayed. At the end of Small High path, a square labeled 3 is drawn with 3 further branches to the right. At the end of Small Average path, a square labeled 4 is drawn with 2 further branches to the right. At the end of Small Low path, a value of $ 13 is displayed. From top to bottom, the paths leaving square 2 are labeled Expand to large and Do nothing, respectively. At the end of the Expand to large path, a value of $ 155 is displayed; and at the end of the Do nothing path, a value of $ 150 is displayed. From top to bottom, the paths leaving square 3 are labeled Expand to large, Expand to medium, and Do nothing, respectively. At the end of the Expand to large path, a value of $ 75 is displayed; at the end of the Expand to medium path, a value of $ 70 is displayed; and at the end of the Do nothing path, a value of $ 25 is displayed. From top to bottom, the paths leaving square 4 are labeled Expand to medium and Do nothing, respectively. At the end of the Expand to medium path, a value of $ 30 is displayed; and at the end of the Do nothing path, a value of $ 15 is displayed. B. 1 2 3 4 In the diagram, 4 squares, 3 circles, and line segments connecting the squares and circles to form a decision tree are drawn. The starting point is the leftmost square labeled 1. From this square, three lines emerge to the right and each extends to a distinct branch point indicated by unlabeled circles. The upper path is labeled Large, the middle path is labeled Medium, and the lower path is labeled Small. From each of the circles, three branches continue to the right. From top to bottom, the first, the fourth, and the seventh line indicate the High path for that branch with a value of 0.35. The second, the fifth, and the eighth line indicate the Average path for that branch with a value of 0.40. The third, the sixth, and the ninth line indicate the Low path for that branch with a value of 0.25. At the end of the Large High path, a value of $ 180 is displayed. At the end of the Large Average path, a value of $ 125 is displayed. At the end of the Large Low path, a value of negative $ 40 is displayed. At the end of medium High path, a square labeled 2 is drawn with 2 further branches to the right. At the end of medium Average path, a value of $ 130 is displayed. At the end of medium Low path, a value of negative $ 25 is displayed. At the end of Small High path, a square labeled 3 is drawn with 3 further branches to the right. At the end of Small Average path, a square labeled 4 is drawn with 2 further branches to the right. At the end of Small Low path, a value of $ 13 is displayed. From top to bottom, the paths leaving square 2 are labeled Expand to large and Do nothing, respectively. At the end of the Expand to large path, a value of $ 155 is displayed; and at the end of the Do nothing path, a value of $ 150 is displayed. From top to bottom, the paths leaving square 3 are labeled Expand to large, Expand to medium, and Do nothing, respectively. At the end of the Expand to large path, a value of $ 75 is displayed; at the end of the Expand to medium path, a value of $ 70 is displayed; and at the end of the Do nothing path, a value of $ 25 is displayed. From top to bottom, the paths leaving square 4 are labeled Expand to medium and Do nothing, respectively. At the end of the Expand to medium path, a value of $ 30 is displayed; and at the end of the Do nothing path, a value of $ 15 is displayed. C. 1 5 6 7 2 3 4 In the diagram, 7 squares and line segments connecting the squares and circles to form a decision tree are drawn. The starting point is the leftmost square labeled 1. From this square, three lines emerge to the right and each extends to a distinct branch point indicated by squares labeled 2, 3, and 4, respectively. The upper path is labeled Large, the middle path is labeled Medium, and the lower path is labeled Small. From each of these squares, three branches continue to the right. From top to bottom, the first, the fourth, and the seventh line indicate the High path for that branch with a value of 0.35. The second, the fifth, and the eighth line indicate the Average path for that branch with a value of 0.40. The third, the sixth, and the ninth line indicate the Low path for that branch with a value of 0.25. At the end of Large High path, a value of $ 180 is displayed. At the end of Large Average path, a value of $ 125 is displayed. At the end of Large Low path, a value of negative $ 40 is displayed. At the end of medium High path, a square labeled 5 is drawn with 2 further branches to the right. At the end of medium Average path, a value of $ 130 is displayed. At the end of medium Low path, a value of negative $ 25 is displayed. At the end of Small High path, a square labeled 6 is drawn with 3 further branches to the right. At the end of Small Average path, a square labeled 7 is drawn with 2 further branches to the right. At the end of Small Low path, a value of $ 13 is displayed. From top to bottom, the paths leaving square 5 are labeled Expand to large and Do nothing, respectively. At the end of the Expand to large path, a value of $ 155 is displayed; and at the end of the Do nothing path, a value of $ 150 is displayed. From top to bottom, the paths leaving square 6 are labeled Expand to large, Expand to medium, and Do nothing, respectively. At the end of the Expand to large path, a value of $ 75 is displayed; at the end of the Expand to medium path, a value of $ 70 is displayed; and at the end of the Do nothing path, a value of $ 25 is displayed. From top to bottom, the paths leaving square 7 are labeled Expand to medium and Do nothing, respectively. At the end of the Expand to medium path, a value of $ 30 is displayed; and at the end of the Do nothing path, a value of $ 15 is displayed. D. 1 2 3 4 In the diagram, 4 squares, 3 circles, and line segments connecting the squares and circles to form a decision tree are drawn. The starting point is the leftmost square labeled 1. From this square, three lines emerge to the right and each extended to separate branch points indicated by circles. The upper path is labeled Large, the middle path is labeled Medium and the lower path is labeled Small. From each circle three branches continue to the right. From top to bottom, the first, the fourth, and the seventh line indicate the High path with a value of 0.25. The second, the fifth, and the eighth line indicate the Average path with a value of 0.40. The third, the sixth, and the ninth line indicate the Low path with a value of 0.35. At the end of Large High path, a value of $ 180 is displayed. At the end of Large Average path, a value of $ 125 is displayed. At the end of Large Low path, a value of $ 40 is displayed. At the end of Medium High path, a square labeled 2 is drawn with 2 further branches to the right. At the end of Medium Average path, a value of $ 130 is displayed. At the end of Medium Low path, a value of $ 25 is displayed. At the end of Small High path, a square labeled 3 is drawn with 3 further branches to the right. At the end of Small Average path, a square labeled 4 is drawn with 2 further branches to the right. At the end of Small Low path, a value of $ 13 is displayed. From top to bottom, the paths leaving square 2 are labeled Expand to large and Do nothing, respectively. At the end of the Expand to large path, a value of $ 155 is displayed; and at the end of the Do nothing path, a value of $ 150 is displayed. From top to bottom, the paths leaving square 3 are labeled Expand to large, Expand to medium, and Do nothing, respectively. At the end of the Expand to large path, a value of $ 75 is displayed; at the end of the Expand to medium path, a value of $ 70 is displayed; and at the end of the Do nothing path, a value of $ 25 is displayed. From top to bottom, the paths leaving square 4 are labeled Expand to medium and Do nothing, respectively. At the end of the Expand to medium path, a value of $ 30 is displayed; and at the end of the Do nothing path, a value of $ 15 is displayed. Part 3 What should management do to achieve the highest expected payoff? The management should build a in order to achieve the highest expected payoff of $ enter your response here. (Enter your response as a whole number.)