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

0.25,

0.40,

and

0.35,

respectively.

A small facility is expected to earn an after-tax net present value of just

$11,000

if demand is low. If demand is average, the small facility is expected to earn

$15,000;

it can be increased to medium size to earn a net present value of

$30,000.

If demand is high, the small facility is expected to earn

$50,000

and can be expanded to medium size to earn

$60,000

or to large size to earn

$145,000.

A medium-sized facility is expected to lose an estimated

$25,000

if demand is low and earn

$90,000

if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of

$100,000;

it can be expanded to a large size for a net payoff of

$155,000.

If a large facility is built and demand is high, earnings are expected to be

$160,000.

If demand is average for the large facility, the present value is expected to be

$80,000;

if demand is low, the facility is expected to lose

$70,000.

Choose the correct decision tree below. Note that each payoff is given in thousands ($000).

Amanager 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 0.25, 0.40, and 0.35, respectively. A small facility is expected to earn an after-tax net present value of just $11,000 if demand is low. If demand is average, the small facility is expected to earn $15,000; it can be increased to medium size to earn a net present value of $30,000. If demand is high, the small facility is expected to earn $50,000 and can be expanded to medium size to earn $60,000 or to large size to earn $145,000. A medium-sized facility is expected to lose an estimated $25,000 if demand is low and earn $90,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $100,000; it can be expanded to a large size for a net payoff of $155,000. If a large facility is built and demand is high, earnings are expected to be $160,000. If demand is average for the large facility, the present value is expected to be $80,000; if demand is low, the facility is expected to lose $70,000. Choose the correct decision tree below. Note that each payoff is given in thousands (5000). OA High 0. High 0.35160 Avg 0.43160 Low 0 3880 Expand to lrg 155 Low 0.2880 Expand to lrg 155 Large $70 High 0.25 Med Avg 0.40 $25 Small High 0.25 Avg 0.40 Large -$70 High 0.35 Med Avg 0.40 -$25 High 0.35 Small Avg 0.40 Do nothing $100 Expand to Irg. Do nothing $100 Low 0.3890 Low 0.2890 Expand to g. 45 Expand to meets Expand to no Do nothing Expand to no $50 Expand to nter Avg 0.40 Low 0.3511 Do nothing $15 Low 0.2511 Do nothing $15 OC. OD Expand to Irg 9155 Do nothing $100 High Avg 0.4360 Low 0.2880 High 0.35 Avg 0.40 Large -$70 High 0.35 Med Avg 0.4 -$25 High 0.35 Small Avg 0.40 Low 0.2880 0.48 160 Low 0.2890 $70 Large High 0.35 Med Avg 0.40 $25 High 0.35 Small Avg 0.40 Low 0.2890 Expand to Irg, Expand to Do nothing Expand to nebo Expand to lrg 155 Do nothing $100 Expand to nt.145 Do nothing Expand to ned Low 0.2511 Do nothing $15 Low 0.2511 Do nothing $15 What should management do to achieve the highest expected payoff? The management should build a in order to achieve the highest expected payoff of S. (Enter your response as a whole number.)