This is a group project. Each group should have $5$ students. You can choose your group members. All group members should enroll in a group via the Group feature on the course website by week $3.$ This project task includes two components: a written report and an oral presentation. Each group should submit a Word file $(.$docx$)$ with answers to each question and an Excel file $(.$xlsx$)$ with Excel outputs to support your answers via the Dropbox feature on our course website by the due date. Only one student submits the group project for the whole group. Your group project should include your group$$s number, your group members$$ names, and student numbers on the cover page.

All group members should work together on every question to understand how to do each step. If any student in your group does not contribute to your group$$s project, please inform the instructor before the due date.

Your group will present your group project in class on the presentation date as specified above.

Each group has $10$ minutes to set up and present and $5$ minutes to take up questions from the class.

Use Excel or Excel QM to do this group project. Please refer to the Excel Instructions Part I and II posted on the course website.

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Topic: Decision Analysis

Question $1$:$(13$ marks$)$

Beverly Mills has decided to lease a hybrid car to save on gasoline expenses and to do her part to help keep the environment clean. The car she selected is available from only one dealer in the local area, but that dealer has several leasing options to accommodate a variety of driving patterns. All the leases are for $3$ years and require no money at the time of signing the lease. The first option has a monthly cost of $$400,$ a total mileage allowance of $42,000$ miles $($an average of $14,000$ miles per year$),$ and a cost of $$0\mathrm{.}10$ per mile for any miles over $42,000.$ The following

table summarizes each of the three lease options:

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$3-$Year Lease

Monthly Cost

Mileage Allowance $($in miles$)$ for $3$ years

Cost per Excess Mile

Option $1$

$$400$

$42,000$

$$0\mathrm{.}10$

Option $2$

$$450$

$51,000$

$$0\mathrm{.}80$

Option $3$

$$500$

$60,000$

$$0\mathrm{.}60$

$$

Beverly has estimated that, during the $3$ years of the lease, there is a $35\%$ chance she will drive an average of $14,000$ miles per year $($Short Mileage$),$ a $45\%$ chance she will drive an average of $17,000$ miles per year $($Medium Mileage$),$ and a $20\%$ chance that she will drive $20,000$ miles per year $($Long Mileage$).$ In evaluating these lease options, Beverly would like to keep her costs as low as possible.

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Develop a payoff $($cost$)$ table for this situation.

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Short Mileage Medium Mileage. Long Mileage

Option $1$

Option $2$

Option $3$