McHuffter Condominiums, Inc., of Pensacola, Florida, recently purchased land near the Gulf of Mexico and is attempting to determine the size of the condominium development it should build. Three sizes of development are being considered; Small, d₁; Medium, d₂; and Large, d₃. At the same time, an uncertain economy makes it difficult to ascertain the demand for new condominiums. McHuffter's management realizes that a large development followed by a low demand could be very costly to the company. However, if McHuffter makes a conservative small-development decision and then finds a high demand, the firm's profits will be lower than they might have been. With the three levels of demand-low, medium, and high. McHuffter's management has prepared the following profit ($000). (25 points).

Payoff Table

Decision Alternatives	Demand
Low	Medium	High
Small, d1	400	500	600
Medium, d2	100	700	900
Large, d3	-300	400	1200

(a) If nothing is known about the demand probabilities, what are the

recommended decision using the Maximax(optimistic), Maximin

(pessimistic) and Equally Likely?

(2) If P(low) = 0.10, P(medium) = 0.5, and P(high) = 0.4. What is the recommended decision using the expected monetary value approach?

(3) What is the expected value of perfect information (EVPI)?