Subcontract Expand Build Small demand (4) Medium demand (.5) Large demand (.1) Small demand (4) Medium demand (.5) Large demand (.1) Small demand (4) Do nothing Expand Do nothing Build Do nothing Expand Other use #1 Other use #2 Do nothing Subcontract Do nothing Other use # 1 Other use #2 Build $1.0 $1.3 $1.3 $1.5 $1.6 $1.8 $0.7 $1.5 $1.0 $1.6 $1.6 $1.5 $1.7 ($0.9) $1.4 $1.0 Expand Build Small dema... Medium demand (.5) Large demand (1) * Net present value in millions EVsubcontract EVexpand EVbuild Small demand (4) Medium demand (.5), Large demand (.1) Other use #2 Do nothing Build Do nothing Other use #2 Subcontract Other use #1 Other use #1 Do nothing Other use #2 $1.0 $1.6 $1.6 $1.5 $1.7 ($0.9) $1.4 $1.0 $1.0 $1.1 $0.9 $2.4 EVsubcontract EVexpand EVbuild Thus, has the highest expected payoff