A manager is trying to decide whether to buy one machine or two. If only one machine is purchased and demand proves to be excessive, the second machine can be purchased later. Some sales would be lost, however, because the lead time for delivery of this type of machine is six months. In addition, the cost per machine will be lower if both machines are purchased at the same time. The probability of low demand is estimated to be 0.20 and that of high demand to be 0.80. The after-tax NPV of the benefits from purchasing two machines together is $70,000 If demand is low and $180,000 if demand is high If one machine is purchased and demand is low, the NPV is $100.000. If demand is high, the manager has three options: (1) doing nothing, which has an NPV of $120,000; (2) subcontracting, with an NPV of $150,000; and (3) buying the second machine, with an NPV of $140,000. a. Choose the correct decision tree for this problem. Note that each payoff is given in thousands of dollars. O A. OB. Low demand High demand Low demand 0.20 100 120 -70 Do nothing Subcontract Buy 2 -100 machines 150 High demand 0.80 Low demand Do nothing -120 Subcontract Buy 2 machines 150 140 High demand 180 Low demand 0.20 Low demand 0.20 -100 Do nothing Low demand 0.80 High demand Subcontract High demand 0.80 Buy 2 Low demand -70 machines 0.20 Low demand 0.80 0.20 High demand 0.80 180 High demand 0.20 Buy 1 machine Buy 2 machines OC. Buy 1 machine Buy 2 machines 140 120 150 140 Buy 1 machine Buy 2 machines OD. Buy 2 machines Buy 1 machine -70 -100 Do nothing Subcontract Buy 2 -70 machines 180 120 150 -140 machine High demand Subcontract 0.80 150 Low demand Buy 2 machines 140 Buy 2 0.20 machines High demand 0.80 180 b. What is the best decision and what is its expected payoff? Best decision is to buy machine(s) and its expected payoff is 5 70 machines Buy 1 machine (Enter your responses as integers) High demand 0.20 Low demand 0.80 High demand 0.20 B 70 ma 180