Problem 13-21 (Algorithmic) 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: a. If the probability that the rezoning will be approved is 0.5, what decision is recommended? Recommended decision = What is the expected profit? Expected profit =$ thousands. 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. Probabilities are as follows: Let H= High resistance to rezoning L= Low resistance to rezoning P(H)=0.53P(L)=0.47P(S1H)=0.15P(S1L)=0.88P(S2H)=0.85P(S2L)=0.12 What is the optimal decision strategy if the investor uses the option period to learn more about the resistance from area residents before making the purchase decision? High resistance: Low resistance: c. If the option will cost the investor an additional $10,000, should the investor purchase the option? What is the maximum that the investor should be willing to pay for the option? Round your answer to three decimal places. Why or why not? EVSI=$ thousands