Question: 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

A manager is trying to decide whether to build a
A manager is trying to decide whether to build a
A manager is trying to decide whether to build a
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 0.40, 0.35, and 025, respectively A small facility is expected to eam an after-tax not present value of just $13,000 il demand is low. If demand is averago, the small facility is expected to earn $15,000, it can be increased to medium size to earn a net present value of $40,000. If demand is high, the small facility is expected to earn 525,000 and can be expanded to medium size to earn $40,000 or to large size to earn $125,000 A medium-sized tacity is expected to lose an estimated $25,00 If demand is low and eam $120.000 i demand is average. If demand is high, the medium-sized facility is expected to eam a net present value of $125,000; it can be expanded to a large size for a net payoff of $155,000 Ha large facility is built and demand is high, earnings are expected to be $170,000. 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 $50,000 Choose the correct decision tree below. Note that each payoff is given in thousands (5000). . 025 $170 Avg 0380 025 Excud 5155 Aug 035.500 LOCA-550 Deneming 5125 Low 0.40 550 $155 La Doing $125 Mes Aug 35 $120 Low 040 $25 High 025 $170 Aug 0.35 $120 Low 0.40 -525 High 0.23 Cards15 Expand to made Espend tot $125 Esconde 40 Experted 40 Small Dering $25 Do nong $15 A035 Low 0.40 513 Aug 035 540 Do noring $25 Eigand to end $40 Dong $15 OD. 025 $170 9 $170 OOS Board $155 ticando 5155 And 0.35 $80 Low 0.40 -$50 UMOS High 25 Med Age 35 $120 Low 0.43 -525 High Sa Avg 035 $80 Low 0.25 550 Larg HA 40 Mos-AX35 Los 25 $120 $25 Smal High 040 Do nothing $125 E 5125 Gapan 940 Dom 525 Egando 40 Dong S15 Done $125 Cards 19. $125 Escando 40 Do nothing 125 Expanded 540 Do nothing $15 Aug 035 Avg Low 0.25 $13 Low 0.40 513 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 as a whole number)

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