A machine shop owner is thinking of expanding his operations. He has 3 options: a drill press, a lathe, and a grinder. The return on investment for each tool is largely determined by whether the company wins a government military contract. The profit and loss for each purchase and the probabilities associated with each contract outcome are shown in the payoff table below:

A machine shop owner is thinking of expanding his operations. He has 3 options: a drill press, a lathe, and a grinder. The return on investment for each tool is largely determined by whether the company wins a government military contract. The prot and loss for each purchase and the probabilities associated with each contract outcome are shown in the payoff table below: Contract No Contract Purchase 040 0.60 Drill Press $40,000 ($8,000) 0200000000 0200000000 Part 1) Compute for the expected value of each alternative and select the best option. The owner of the machine shop was approached by a consultant who offered to help ascertain whether the owner will win the government contract. The consultant previously worked for the military and maintained strong connections with various personnel within the military. The owner found out that there is a 0.70 probability that the consultant would present a favorable report, given that the contract is awarded to the shop and a 0.80 probability that the consultant would present an unfavorable report, given that the contract is not awarded. Part 2) Using a decision tree analysis, determine the best strategy for the owner of the machine shop. Include the expected value (EMV) of the strategy and the maximum fee that the owner should pay the consultant