QUESTION 1 (2O MARKS) Firlands Limited, a ratsil outiet, is laced with a decision rogarding whather or not to expand and build small or large premises at a prime location. Small premises would cost N5300 000 to build and large premises would cust N5550 000 Regardess of the type of premises buit, if trigh demand exists then the net income is expected to be NS1 500000 . Atermatively, it icN demand axists, then ret income is expectad to bo NS600 000. If inge premises are built then piobability of high darnand is 0.75 . 11 the smaller premises are built then the probability of high demand fals to 0.60 . Firland has the option of undertaking a survey costing NS5O 000 The survey prodictli whethet there is likely to be a good or bad reaponse to the size of the premisea. The likelihood of there being a good responae, from previous survalys, has boan estimitind at 0.80 . If the survey indicates a good response then the company will build the large premises. If the survey does give a good tesul then the probahility that there will be high derrand from the large prartises increeses to 0.96 . It the survey indicates a bad response then the company will abondon all exparsior plans