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Philip Musa can build either a large video rental section or a small one in his Birmingham drugstore. He can also gather additional information or

Philip Musa can build either a large video rental section or a small one in his Birmingham drugstore. He can also gather additional information or simply do nothing. If he gathers additional information, the results could suggest either a favorable or an unfavorable market, but it would cost him $ to gather the information. Musa believes that there is a50-50 chance that the information will be favorable. If the rental market is favorable, Musa will earn $ with a large section or $ with a small. With an unfavorable video-rental market, however, Musa could lose $ with a large section or $ with a small section. Without gathering additional information, Musa estimates that the probability of a favorable rental market is . A favorable report from the study would increase the probability of a favorable rental market to .Furthermore, an unfavorable report from the ad

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