Bakery Products is considering the introduction of a new line of pastries. In order to produce the new line, the bakery is considering either a major or a minor renovation of its current plant. Bill Wicker, head of operations, has developed the following conditional values table:

ALTERNATIVES FAVORABLE MARKET UNFAVORABLE MARKET Major renovation $100,000 -$90,000 Minor renovation $ 40,000 -$20,000 Do nothing $ 0 $ 0 Under the assumption that the probability of a favorable market is equal to the probability of an unfavorable market, determine:

a) The appropriate decision tree showing payoffs and probabilities.

b) The best alternative using expected monetary value (EMV).