Question: Using the following information to answer the questions below. Expand $0 High Demand (P.) 2 $02 Do Nothing la Low Demand (P) $0, Expand Small

Using the following information to answer the

Using the following information to answer the questions below. Expand $0 High Demand (P.) 2 $02 Do Nothing la Low Demand (P) $0, Expand Small 1 Expand Large High Demand (P.) $0, 1b Low Demand (P) $03 Demand likelihood: o Probability of high demand: PH = 0.1. o Probability of low demand: PL = 0.9. Outcome values (in $): = o 01 = 59. o O2 = 37. o 03 = 76. o 04 = 95. o O5 = 23. What is the expected value at decision node 2? EV2 = What is the expected value at chance node 1a? What is the expected value at decision node 2? EV2 = What is the expected value at chance node 1a? EV1a = What is the expected value at chance node 1b? EV 16 = What is the expected value at decision node 1? EV1 = What is the optimal decision at decision node 1? a. Expand small b. Expand large c. Expand small or large (no difference) d. Do nothing What is the expected value at decision node 1? EV1 = What is the optimal decision at decision node 1? a. Expand small O b. Expand large O c. Expand small or large (no difference) O d. Do nothing

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