Question: Problem 55-5 (Static) Compute the expected payoffs for each alternative shown in the following decision tree (Values in the tree are in millions. Use the

Problem 55-5 (Static) Compute the expected
Problem 55-5 (Static) Compute the expected payoffs for each alternative shown in the following decision tree (Values in the tree are in millions. Use the same format, rounding to 2 decimals, to enter your answers.) $1.00 $1.3 Do nothing Smal demand ta Expand $1.3 Medium demand. Large demand.1) $1.5 Do nothing Expand $1.6 Buld $1.8 Subcontract $0.7 Do nothing Other Usa $1.5 Other use 2 $1.0 Smail demand (4) Expand Medium demand (5) $1.6 Large demand (1) $1.6 Do nothing Subcontract $1.5 Build $1.7 Build $0.91 Do nothing Other use 21 $1.4 Other use 2 Small demand 14 Medium demand (5) $1.0 $1.0 Large demand 1.1) Do nothing Other use 21 $1.1 Other use 2 $0.9 * Net present value in millions $2.4 EVsubcontract Evexpand EVbuild Thus, has the highest expected payoff

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