Please answer part b with work.

it A manager is trying to decide whether to buy one machine or two. If only one is purchased and demand proves to be excessive, the second machine can be purchased later. Some sales will be lost, however, because the lead time for producing this type of machine is six months. In addition, the cost per machine will be lower if both are purchased at the same time. The probability of low demand is estimated to be 0.30. The after-tax net present value of the benefits from purchasing the two machines together is $70,000 If demand is low and $160,000 if demand is high. If one machine is purchased and demand is low, the net present value is $110.000. If demand is high, the manager has three options. Doing nothing has a net present value of $120,000; subcontracting. $160.000; and buying the second machine, S130,000 . 3. Choose the correct decision tree for this problem. Note that each payoff is given in thousands of dollars. MA . Low demand 110 Do nothing Low demand 110 Do nothing 120 a Buy 1 machine Buy 2 machines 120 Q -160 160 0.30 High demand 0.70 Low demand 0.30 Subcontract Buy 2 70 machines 11 Buy 2 machines 130 0.30 High demnand 0.70 Low dernand 0.30 High demand 0.70 Subcontract Buy 1 70 machine 130 Buy 1 High demand 160 machine 160 0.70 11 C. D 11 a a 11 Low demand Low demand 110 70 Do nothing 120 0.30 Do nothing Buy 1 machine 1 High demand 120 160 Subcontract Buy 2 110 machines Subcontract Buy 1 machine 1 Buy 2 machines High demand 0.70 160 Low demand 130 Buy 2 -130 Buy 2 machines 70 machines High demand Low dernand 0.30 160 b. How many machines should the company buy initially? What is the expected payoff for this alternative? Best decision is to buy machine(s) and its expected payoff is $. (Enter your responses as integers.) 10 Enter your answer in the edit fields and then click Check Answer ? All parts showing Clear All Check