please help

Payoff matrix and choosing cutoff values (continuation of 11-32, 11-33, and 11-34). Assume the same information for Keebler-Olson as in Problems 11-31, 11-32, 11-33, and 11-34. James plans to invest $100 in each of the 1,000 loans he is examining. If he decides not to invest in a loan, he will invest the $100 in an alternative investment. As James and the data scientist work to improve their model, James mentions that different model predictions are associated with different payoffs for Keebler-Olson. Based on his management accounting experience, James estimates that the average payout for a repay loan of 3 years is $48 dollars. James also estimates that Keebler-Olson loses $60 over 3 years if it purchases a default loan. If Keebler-Olson does not invest in a loan, it places the money in an alternative investment with a payout of $14 over 3 years. James uses the pruned tree to evaluate the total payoff at a cutoff value of 0.25 and a cutoff value of 0.50.

Fill in the payoff matrix below as in Exhibit 11-21.

Payoff Matrix

	Predicted Outcomes
Default (Do Not Invest in Loan)	Repay (Invest in Loan)
Actual Outcomes	Default
Repay

James is deciding whether to use a cutoff of 0.25 or 0.5. Complete the confusion matrices below using the pruned tree for each cutoff as in Exhibits 11-19 and 11-20.

Confusion Matrix (0.50)

	Predicted Outcomes
Default (Do Not Invest in Loan)	Repay (Invest in Loan)
Actual Outcomes	Default
Repay

Confusion Matrix (0.25)

	Predicted Outcomes
Default (Do Not Invest in Loan)	Repay (Invest in Loan)
Actual Outcomes	Default
Repay

What cutoff value should James use? Explain.