2. (a) Mr. Sakala is interested in developing and marketing a new drug. The cost of extensive research to develop the drug would be K100,000. The manager of research programme said that there is 60% chance that the drug will be developed successfully. The market potential is assessed as follows with present value of profit: 2 Market conditions Probability Present value of profits (K) Large market potential 0.1 500,000 Moderate market potential 0.6 220,000 Low market potential 0.3 80,000 The present value figures do not include the cost of research. While Mr. Sakala was considering this proposal, another similar proposal came up which also required the investment of K100,000 .The present value of profit for the second proposal was K120,000 . The return on the investment in the second proposal is almost certain. i. Draw a decision tree for Mr. Sakala indicating all choices and events ii. What decision Mr. Sakala should take regarding the investment of K100,000? iii. If Mr. Sakala is a risk averter, should he change the decision given by you?