An independent electronics store is contemplating either opening another store or expanding its existing location. The payoff table for these two decisions is:

	s1	s2	s3
New Store	-$60,000	$15,000	$180,000
Expand	-$30,000	$15,000	$90,000

Peter, the owner of the store, has calculated the indifference probability for the lottery having a payoff of $180,000 with probability p and -$60,000 with probability (1-p) with the following sure amounts as follows:

Amount	Indifference Probability (p)
-$30,000	0.4
$15,000	0.7
$90,000	0.9

1. Suppose Peter has defined the utility of -$60,000 to be 0 and the utility of $180,000 to be 100. What would be the utility values for -$30,000, $15,000, and $90,000 based on the indifference probabilities?
2. Suppose P(s₁) = .4, P(s₂) = .3, and P(s₃) = .3. Which decision should Peter make? Compare with the decision using the expected value approach. Is Peter a risk taker or is he risk averse?