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Amy is interested in leasing a new BMW and has contacted three automobile dealers for pricing information. Each dealer offered Amy a closed-end 36-month lease

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Amy is interested in leasing a new BMW and has contacted three automobile dealers for pricing information. Each dealer offered Amy a closed-end 36-month lease without down payment. It also includes a monthly charge and a mileage allowance. The leasing will also incurred a surcharge for additional kilometers. Table Q2 shows monthly lease cost, mileage allowance and cost for additional kilometers. Table Q2 Amy decided to choose the lease option that will minimize her total 36-month lease cost. The difficulty that Amy faced is not sure how many kilometers she will drive over the next three years. For the purpose of this decision, she believes it is reasonable to assume that she will drive 12,000 kilometers per year, 15,000 kilometers per year, or 18,000 kilometers per year. Based on this assumption, Amy estimated her total costs for the three lease options. For example, she figures that the Batcha BMW lease will cost her RM10,764 if she drives 12,000 kilometers per year, RM12,114 if she drives 15,000 kilometers per year, or RM13,464 if she drives 18,000 kilometers per year. (a) Determine the alternative decision to be made, and the chance event for Amy's problem. (2 marks) (b) Construct a payoff table for Amy's problem. (6 marks) (c) Construct a decision tree. (3 marks) (d) Recommend alternative decision based on the following approach: (i) Optimistic (3 marks) (ii) Conservative (3 marks) (iii) Minimax regret

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