Kindly Assist with the attached Cost and Management Accounting Question

Question 4 (10 marks) The manager of a popular guesthouse in Windhoek is deciding if she should renovate the guesthouse in the current year (immediately) or postpone for another year. The cost of the renovations for the coming year is N$9() 000. If the management decides to do the renovations this year, there is a 213 chance that they will be completed in time. If completion in time is achieved, the contribution can be at any of these Page 17 of 18 FACULTY OF COMMERCE, MANAGEMENT AND LAW OLD CURRICULUM MODULES levels with equal probability: N$200 000 if there is high demand N$150 000 if there is medium demand N$IOO 000 if demand is low Should the management fail to complete the renovations in time, some rooms will not be available for occupation and the demand might be medium or low with equal chance of occurring. Without renovations, the guesthouse would generate a contribution of N$37 500 for the coming year. Required Using a decision tree, advise the management if the renovations 4.1 should be started in this year or should be postponed to next year. Total Marks Sub- Total total 10 10 10