Problem 5S-7 (Algo) The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the lease for another 10 years or to relocate near the site of a proposed motel. The town planning board is currently debating the merits of granting approval to the motel. A consultant has estimated the net present value of Theme Park's two alternatives under each state of nature as shown below. Suppose that the management of Theme Park, Inc., has decided that there is a 0.29 probability that the motel's application will be approved. Options Renew Relocate Motel Approved $ 490,000 2,225,000 Motel Rejected $4,225,000 190,000 a-1. If management uses maximum expected monetary value as the decision criterion, calculate expected monetary value for the alternatives "Renew" and "Relocate". Answer is complete and correct. Expected Value Alternative Renew Relocate $ 3,141,850 $ 780,150 a-2. Which alternative should it choose? Relocate Renew b. If management has been offered the option of a temporary lease while the town planning board considers the motel's application, would you advise management to sign the lease? The lease will cost $29,000. Answer is complete but not entirely correct. because the cost Yes less is than EVPI of $ 3,070,850 (