Two construction companies are bidding against one another for the right to construct a new community center building in Lewisburg, Pennsylvania. The first construction company, Fine Line Homes, believes that its competitor, Buffalo Valley Construction, will place a bid for this project according to the distribution shown in Table 7.15. Furthermore, Fine Line Homes estimates that it will cost $160,000 for its own company to construct this building. Given its fine reputation and long-standing service within the local community, Fine Line Homes believes that it will likely be awarded the project in the event that it and Buffalo Valley Construction submit exactly the same bids. Employ a decision tree to identify Fine Line Homes’ profit-maximizing bid for the new community center building.

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TABLE 7.15 Distribution of Possible Competing Bids for Construction Project Buffalo Valley Construction's Bid $160,000 $165,000 $170,000 $175,000 Probability 0.40 0.30 0.20 0.10