Expando, Inc., is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $5 million. If demand for new products is low, the company expects to receive $9 million in discounted revenues (present value of future revenues) with the small facility. On the other hand, if demand is high, it expects $10 million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $7 million. Were demand to be low, the company would expect $10 million in discounted revenues with the large plant. If demand is high, the company estimates that the discounted revenues would be $15 million. a) Construct a decision tree to help Expando make the best decision. Please include the probabilities of different states and the payoffs in the decision tree full credit.(14 points)

(b) Calculate the EMVs for each of the three alternatives. Please note that youre expected to subtract the construction costs from the discounted revenues in the calculation. For each alternative, please include at least one step of calculation and the correct answer for full credit. (10 points)

(c) Suppose a marketing research firm claims that it is able to tell whether the future demand will be high or not accurately. What is the expected value with perfect information (EVwPI)? Please provide the formula, at least one step of calculation, and the correct answer for full credit. (6 points)

(d) What is the EVPI based on your answer to (c)? Please provide at least one step of calculation and the correct answer for full credit. (4 points)