Need Solution for only Question 9b

Question 9 A machine shop owner is attempting to decide whether to purchase a new drill press, a lathe, or a grinder. The return from each will be determined by whether the company succeeds in getting a government military contract. The profit or loss from each purchase and the probabilities associated with each contract outcome are shown in the following payoff table: Purchase Drill press Contract 0.35 $20,000 $15,000 $11,000 No Contract 0.65 $15,000 $18,000 $4,000 Lathe Grinder (a) Compute the expected value for each purchase and select the best one. (1 mark) (b) The machine shop owner is considering hiring a consultant to ascertain whether the shop will get the government contract. The consultant is a former military officer who uses various personal contacts to find out such information. By talking to other shop owners who have hired the consultant, the owner has estimated a 0.7 probability that the consultant would present a favorable report, given that the contract is awarded to the shop, and a 0.8 probability that the consultant would present an unfavorable report, given that the contract is not awarded. Using decision tree analysis, determine the decision strategy the owner should follow, the expected value of this strategy, and the maximum fee the owner should pay the consultant. Decision tree (1 mark) Expected value of the strategy (1 mark) EVSI (1 mark)