Question 3 (25 marks] A developer would like to build an oil tank on a piece of land. There is a high probability (p = 0.3) that the soil condition is poor and does not provide enough support for the oil tank. With the current foundation design, damage to the oil tank costing $150m will occur. It is possible to strengthen the foundation at a cost of $30m. However, due to the same soil condition, minor repairs costing $8m may still be necessary. (a) What should the developer do using expected value decision making? [8 marks] (b) Determine the Expect Value of Perfect Information. [7 marks) (c) The developer can conduct a soil investigation costing $10m. The performance of the soil investigation is shown in Table Q3. Redraw the decision tree to include the information from the soil investigation. What is the Expected Value of Additional Information? What is the best decision now? [10 marks) Enough Support Not Enough Support "Enough Support" "Not Enough Support" 0.8 0.2 0.1 0.9 Table Q3