please can you answer this questions?

4. (20 pts) A real estate investor has the opportunity to purchase and currently zoned residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of dollars) are shown in the following payoff table: Rezoning Approved Rezoning Not Approved Purchase 550 - 190 Do not purchase 0 0 a) If the probability that the rezoning will be approved is 5, what decision is recommended? What is the expected profit? Draw a decision tree, roll it back, and advise what the best strategy in this scenario is. b) The investor can purchase an option to buy the land. Under the option, the investor maintains the rights to purchase the land anytime during the next three months while learning more about possible resistance to the rezoning proposal from area residents. Probability in this case for the high resistance to rezoning is 0.51 and low resistance to rezoning is 0.49. In case the resistance to the rezoning is high, the probability the rezoning will be approved is 0.18 and in case the resistance to the rezoning is low, the probability the rezoning will be approved is 0.88. What is the optimal decision strategy in this case, when the investor uses the option period to learn more about the resistance from area residents before making the land purchase decision? Based on these assumptions, draw a decision tree, roll it back, and state clearly what the optimal decision is with its expected value. Make sure to include all expected values beneath all chance nodes and include all decision values (=value of the best decision) beneath all decision nodes. c) of the option will cost the investor an additional $10,000 should the investor uses the option? What is the maximum that the investor should be willing to pay for the option purchase? Prof. Leskovskaya 4. (20 pts) A real estate investor has the opportunity to purchase and currently zoned residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of dollars) are shown in the following payoff table: Rezoning Approved Rezoning Not Approved Purchase 550 - 190 Do not purchase 0 0 a) If the probability that the rezoning will be approved is 5, what decision is recommended? What is the expected profit? Draw a decision tree, roll it back, and advise what the best strategy in this scenario is. b) The investor can purchase an option to buy the land. Under the option, the investor maintains the rights to purchase the land anytime during the next three months while learning more about possible resistance to the rezoning proposal from area residents. Probability in this case for the high resistance to rezoning is 0.51 and low resistance to rezoning is 0.49. In case the resistance to the rezoning is high, the probability the rezoning will be approved is 0.18 and in case the resistance to the rezoning is low, the probability the rezoning will be approved is 0.88. What is the optimal decision strategy in this case, when the investor uses the option period to learn more about the resistance from area residents before making the land purchase decision? Based on these assumptions, draw a decision tree, roll it back, and state clearly what the optimal decision is with its expected value. Make sure to include all expected values beneath all chance nodes and include all decision values (=value of the best decision) beneath all decision nodes. c) of the option will cost the investor an additional $10,000 should the investor uses the option? What is the maximum that the investor should be willing to pay for the option purchase? Prof. Leskovskaya