1.The Wilhelms Cola Company plans to market a new pineapple-flavoured cola this summer. The decision is whether to package the cola in returnable or in non-returnable bottles. Currently, the provincial legislature is considering eliminating non-returnable bottles. Tybo Wilhelms, president of Wilhelms Cola Company, has discussed the problem with his government representative and established the probability to be 0.70 that non-returnable bottles will be eliminated. The table below shows the estimated monthly profits (in thousands of dollars) if the cola is bottled in returnable versus non-returnable bottles. Of course, if the law is passed and the decision is to bottle the cola in non-returnable bottles, all profits would be from out-of-province sales.

Alternative Law is passed (S₁) Law is not passed (S₂)

Returnable Bottle $80 $40

Non-returnable Bottle $25 $60