Steve Mountain Bicycle Shop is considering three options for its facility next

year. Steve can expand his current shop, move to a larger facility, or make no

change. With a good market, the annual payoff would be $76,000 if he

expands, $90,000 if he moves, and $40,000 if he does nothing. With an average

market, his payoffs will be $30,000, $41,000, and $15,000, respectively. With a

poor market, his payoff will be -$17,000, -$28,000, and -$4,000.

Question 7 (2 pts for manual calculation; 2 pts for using Excel): Now, Steve got informed that the probability of markets are: P(good market) = 0.60, P(average market) = 0.25, and P(poor market) = 0.15. Which option should Steve choose if he uses the expected monetary value (EMV) criterion?

Question 8 (2 pts for manual calculation; 2 pts for using Excel): Based on the probabilities provided in Question 7, which option should Steve choose if he uses the expected opportunity lost (EOL) criterion?