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 $21,000 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 $50,000. 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 $75,000. 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 $115,000. If a large facility is built and demand is high, earnings are expected to be $150,000. 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 $40,000. Choose the correct decision tree below. Note that each payoff is given in thousands ($000). O A. B. w 6 A Expand to Irg $115 Do nothing $100 C C Expand to Irg $115 [ High 0.35 Avg 0.40 $80 Low 0.25 - $40 Large High 0.35. $150 Med Avg 0.40 $90 Low 0.25 - $25 High 0.35 Small Avg 0.40 Low 0.25 $21 High 0.35 $150 Avg 0.40 $80 Low 0.25 $40 Large High 0.35 Med, Avg 0.40 $90 Low 0.25 - $25 High 0.35 Small 6 Expand to Irg $75 Expand to meda $60 Do nothing $50 Expand to med $50 Do nothing $25 Do nothing $100 Expand to Irg $75 Expand to med $60 Do nothing $50 Expand med $50 Do nothing $25 Avg 0.40 Low 0.25 $21 D. & G High 0.355150 C c Expand to Irg $115 Expand to Irg $115 [ Avg 0.40 $80 Low 0.25 - $40 Large High 0.35 Med Avg 0.40 $90 Low 0.25 -$25 High 0.35 Small 3 High 0.25. $150 Avg 0.40 $80 Low 0.35 $40 Large High 0.25 Med Avg 0.40 $90 Low 0.35 $25 High 0.25 Small E Do nothing $100 Expand to Irg $75 Expand to med $60 Do nothing $50 Expand to med $50 Do nothing $25 3 Do nothing $100 Expand to Irg $75 Expand to med $60 Do nothing Expand to med $50 $50 Do nothing $25 Avg 0.40 Low 0.25, $21 Avg 0.40 Low 0.35 $21 What should management do to achieve the highest expected payoff? The management should build order to achieve the highest expected payoff of ponse as a whole number.) $ medium facility small facility large facility