Use the information provided below for all questions about this scenario.

Jane Woodhurst is considering whether to buy one or two machines for a certain stage of the assembly line at a new electric car startup company. If one machine is purchased initially, a second one can be purchased later after observing demand. However buying the machines together is cheaper. Also the lead time to get a machine is long, so there may be lost sales if the decision to buy the 2nd machine is taken later after seeing high demand.

• Jane estimates that demand may be low with a probability of 0.25, or medium with a probability of 0.3, or high with a probability of 0.45.
• If two machines are purchased the payoffs are 90,000$ for low demand, 200,000$ for medium demand, and 500,000$ for high demand.
• If one machine is purchased, then no additional decision is required if the demand is low or medium (as one machine can handle these cases). However if the demand is high, Jane has 3 options: outsource some production, buy a 2nd machine, do nothing (live with 1 machine).
• If one machine is purchased, and demand is low the payoff is 120,000$ and if demand is medium the payoff is 250,000$.
• If one machine is purchased and demand is high, then outsourcing gives a payoff of 300,000$, purchasing a second machine gives a payoff of 400,000$ and doing nothing gives a payoff of 250,000$.

What should Jane do?

1. Purchase 1 machine and do nothing later.
2. Purchase 1 machine now and outsource production later.
3. Buy both machines now.
4. Purchase 1 machine now and purchase the 2nd machine if demand is high.

Choose an option and explain your answer in details.