A company is planning a plant expansion. They can build a large or small plant. The payoffs for the plant depend on the level of consumer demand for the company's products. For the large plant, the company expects $85 million in profit if demand is high and $35 million if demand is low. For the small plant, the company expects $54 million in profit if demand is high and $19 million if demand is low.

The company believes that there is a 72% chance that demand for their products will be high and a 28% chance that it will be low.

Construct a payoff and regret matrix based on the given information.

1. What is the decision according to the EMV criterion? Please provide work.

2. Is the decision sensitive to the demand assumptions given?