QUESTION 4 Southport Mining Corporation is considering a new mining venture in Indonesia. There are two uncertainties associated with this prospect; the metallurgical properties of the ore and the net price (market price minus mining and transportation costs) of the ore in the future. The metallurgical properties of the ore would be classied as either \"high grade" or "low grade". Southport's geologists have estimated that there is a 70% chance that the ore will be "high grade", and otherwise, it will be \"low grade". Depending on the net price, both ore classications could be commercially successful. The anticipated net prices depended on market conditions, and also on the metallurgical properties of the ore. Southport's economists have simplied the continuous distribution of possible prices into a two-outcome discrete distribution ("high" or \"low\" net price) for the investment analysis. The probabilities of these net prices, and the associated outcomes (in millions of dollars), are summarized below. High Grade metallurgy (p=0,7) Low Grade metallurgy (p=0.3) Probability Probability E__ LOW -$160 Should Southport invest in the mine or not? What is their expected prot? O a. Southport should invest, the expected profit is 36.8. O b.50uthport should invest, the expected profit is 73.6. 0 c. Southport should invest if the price is high, the expected prot is 176. O d.Southport should not invest, since the potential losses are too hight