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b. How many machines should the company buy invially? What is the expected payoff for this aiternative? Best decinion is to buy machife(n) and its

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b. How many machines should the company buy invially? What is the expected payoff for this aiternative? Best decinion is to buy machife(n) and its expected pavolf is $ (Enter wour responses as indeqers.) A manager is trying to decide whether to buy one machine or two. If only one is purchased and demand proves to be excessive, the second machine can be purchased later. Some sales will be lost, howover, because the lead time for producing this type of machine is six months. In addition, the cost per machine will be lower if both are purchased at the same time The probablity of low demand is estimated to be 0.20. The after-tax net present value of the benefits from purchasing the two machines together is $90,000 if demand is low and $180,000 if demand is high. If one machine is purchased and demand is low, the net present value is $100,000. If demand is high, the manager has three options. Doing nothing has a net present value of $110,000; suboontracting, $130,000; and buying the second machine, $120,000, a. Choose the correct docision troe for this problem. Note that each payotf is given in thousands of dollars

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