3. DATA STORAGE, Inc. is not sure whether it should move into a larger facility now or a smaller facility with the potential for expansion. The following estimates for demand have been calculated.

The likelihood of demand being high is 0.70

The likelihood of demand being low is 0.30

Profitability is estimated for each alternative:

Moving into a large facility has a profitability of either $1,000,000 or $600,000, depending on whether demand turns out to be high or low.

Moving into a small facility has a profitability of $500,000 assuming demand is low.

Moving into a small facility would required considering expanding if demand turned out to be high. If DATA STORAGE decided to expand at that point, profitability would be $800,000. If it did not expand further, profitability would be $500,000.

(a). Draw a decision tree and solve it. (4 points).

(b). What should DATA STORAGE do? (2 points)

Please use Excel to solve this problem. Thank you so much!