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A company must decide whether to build a new facility or do nothing. The company estimates the future profit/loss based on the future demand, represented

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A company must decide whether to build a new facility or do nothing. The company estimates the future profit/loss based on the future demand, represented by Table 1. Table 1. Estimated profit by the company Decision Future Demand Alternative outcomes Low High Build a new facility $2,000 $10,000 Do Nothing $0 The probabilities of Low and High demand are: P(Low) = 0.45 and P(High) = 0.55. You need to complete the following tasks using a decision tree. You can create the decision tree using TreePlan, or you can draw it by hand or in Word/Excel/PowerPoint. If you draw your tree by hand, you must scan it or take a clear photo of it, then attach it to an Excel or Word file and attach it with your submission. You must provide your answers directly in Avenue, in the Quizzes > Final Exam Decision Tree (C02) section. Your numerical answers must only contain a number without any other symbols. For example, if your answer is $123,456, you must only type 123456 in Avenue. Tasks 1. Using the initial tree, what is the optimal decision alternative? Select one of the options 2. Using the initial tree, what is the maximum EMVY Type a number only. 3. A consultant heard rumors that the market conditions could get worse and offers to conduct a survey to better estimate the future demand. He will charge the company $3,000 for it. If his estimate is positive, the chance of High demand P(High) changes to 0.75. If the estimate is negative, the company will do nothing. The probability that the survey estimate is positive is 0.5. a. Update the decision tree to include the results of the estimation decision, there is no Avenue question related to this task, but you need the information from it to complete the next tasks. 4. With estimation, what is the optimal decision alternative if the estimation is positive? Select one of the options 5. With estimation, indicate the overall expected profit or loss for the company. Type a number only 6. What would you recommend to the company - should they pay for the survey or not? Select one of the options

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