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 0.25, 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 $25,000; it can be increased to medium size to earn a net present value of $60,000. If demand is high, the small facility is expected to earn $50,000 and can be expanded to medium size to earn $70,000 or to large size to earn $150,000. A medium-sized facility is expected to lose an estimated $50,000 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 $115,000. 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). O A. B. Expand to Irg Expand to Irg $115 Large $115 High 0.40 $160 Avg 0.35 $80 Low 0.25 $70 Large High 0.40 Med Avg 0.35 $90 Low 0.25 $50 High 0.40 Small High 0.25 $160 Avg 0.35 $80 Low 0.40 -$70 High 0.25 Avg 0.35 $90 Low 0.40 - $50 High 0.25 Med 1 3 Do nothing $100 Expand to Irg $150 Expand to med $70 Do nothing $50 Expand to med $60 Do nothing $25 Small 3 Do nothing $100 Expand to Irg $150 Expand to med $70 Do nothing $50 Expand to med $60 Do nothing $25 Avg 0.35 Low 0.25 $11 Avg 0.35 Low 0.40 $11 O c. OD. Expand to Irg Do nothing $115 $100 Expand to Irg $115 High 0.25 Avg 0.35 $80 Low 0.40 - $70 Large High 0.25 $160 Med Avg 0.35 $90 Low 0.40 - $50 High 0.25 Small Avg 0.35 Low 0.40 $11 High 0.25 $160 Avg 0.35 $80 Low 0.40 Large - $70 High 0.25 Med. Avg 0.35 $90 Low 0.40 - $50 High 0.25 Small 6 Expand to Irg $150 Expand to med $70 Do nothing $50 Expand to med $60 Do nothing $25 Do nothing $100 Expand to Irg $150 Expand to med $70 Do nothing $50 Expand to med $60 Do nothing $25 Avg 0.35 Low 0.40 $11 7 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.)