I need help answering this decision tree homework question.
Cheryl Druehl Retailers, Inc., must decide whether to build a small or a large facility at a new location in Fairfax. Demand at the location will either be low or high, with probabiliti facility, the payoff is $280,000. If a small facility is built and demand proves to be high, but Cheryl then decides not to expand the facility, the payoff is $253,000. ively. If Cheryl builds a small facility and demand proves to be high, she then has the option of expanding the facility. If a small facility is built demand proves to be high. and then the expands the If a small facility is built and demand proves to be low, then there is no option to expand and the payoff is $240.000. If a large facility is built and demand proves to be low. Cheryl then has the option of stimulating demand through local advertising. If she does not exercise this option, then the payoff is $45,000. If she does exercise the advertising option, then the response to advertising will either be modest or sizable, with probabilities of 0.5 and 0.5. respectively. If the response is modest. the payoff is $35.000. If it is sizable, the payoff is $240.000. Finally. if a large facility is built and demand proves to be high, then no advertising is needed and the payoff is $300,000. 3) What should Cheryl do to maximize her expected payoff? Choose the correct decision tree below. Note that all payoffs are in $1,000s. A O B. Q 240 @ ow (0.3) low (0.3) 240 @ expand 280 large high (0.7) 2 expand 280 don't expand 253 smal high (0.7) modest (0.5) 35 don't expand 253 modest (0.5) 35 advertise small low (0.3) (0.5) 240 sizable 2 3 advertise 45 Idon't advertise large low (0.3) (0.5) 240 3 Idon't advertise 45 high (0.7) - 300 high (0.7) - 300 O c. OD. 2 240 @ low (0.3) 240 @ low (0.7) expand small 280 high (0.7 small 2 expand 280 don't expand 253 high (0.3) modest (0.5) 35 don't expand 253 1 modest (0.5) 36 advertise sizable (0.5) 240 large low (0.3) advertise - 45 (0.5) 240 don't advertise large low (0.3) don't advertise high (0.7) -300 high (0.7) - 300 Cheryl should build the V facility. If demand proves to be high, then to stimulate demand. b) What is the value of this expected payoff? The expected payoff is $|(round your response to the nearest dollar)
