Bear & Sunny Incorporated is an Ontario-based legal firm with expertise in insurance litigation. After extensive research, the firm would like to expand into Northern Ontario and believes that it can earn a net income of $55,000 per year under normal circumstances.

Due to the pandemic, Bear & Sunny has approached an analytics firm to help determine market conditions after opening the Northern Ontario office. The analytics firm predicts a mini-recession is a 25% possibility, which would reduce net income to $30,000. A severe recession is less probable at 20%, where Bear & Sunny would lose $9,000. There is also a 10% possibility that the Northern Ontario office will fail, and Bear & Sunny will lose $310,000.

Required:

Should Bear & Sunny open an office in Northern Ontario? Show all calculations.