The following payoff table provides profits based on various possible decision alternatives and various levels of demand at Amber Gardner's software firm:

		Demand Level
		0.30	0.70
		Low	High
Alternative	A	$12,500	$40,000
	B	$7,500	$51,000
	C	($2,000)	$60,000
*Profits in $ thousands

1. Using Excel, create an X,Y plot the expected-value lines for the three alternatives on a graph. Label the graph completely and clearly.
2. Is there any alternative that would never be appropriate in terms of maximizing expected profit? Explain on the basis of your graph in part a.
3. Over what range of P(High Demand) would alternative A be the best choice if the goal is to maximize expected profit? Show work.
4. Over what range of P(High Demand) would alternative C be the best choice if the goal is to maximize expected profit? Show work.
5. Using the probability of low demand as 0.30 (therefore probability of high demand = 0.70), compute the expected payoffs of each of the alternatives. Show work. Using the expected payoff criterion, which of the alternatives will you recommend?