Edwards Machine Tools needs to purchase a new machine The basic model is slower but costs less, whereas the advanced model is faster but costs more Profitability will depend on future demand The following table presents an estimate of profits over the next three years Demand Volume Decision Low Medium High Basic model $85,000 $110,000 $130,000 Advanced model $30,000 $135,000 $175,000 A forecasting study determines that he probabilities of demand volume are Low 0 2, Medium 0 5, and High 0 3 Using the techniques on decision analysis, determine the expected value decision Round your answers to the nearest dollar Expected profit for the basic model $ Expected profit for the advanced model $ Note it is not 108333 33 for the basic model and 113333 33 for the advanced one

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Question: Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less, whereas the advanced model is faster but costs

Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less, whereas the advanced model is faster but costs more. Profitability will depend on future demand. The following table presents an estimate of profits over the next three years.

	Demand Volume
Decision	Low	Medium	High
Basic model	$85,000	$110,000	$130,000
Advanced model	$30,000	$135,000	$175,000

A forecasting study determines that he probabilities of demand volume are Low = 0.2, Medium = 0.5, and High = 0.3. Using the techniques on decision analysis, determine the expected value decision. Round your answers to the nearest dollar.

Expected profit for the basic model: $ _________

Expected profit for the advanced model: $ _________

Note: it is not 108333.33 for the basic model and 113333.33 for the advanced one.

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