The Lake Placid Town Council has decided to build a new community center to be used for conventions,r concerls, and other public events, but considerable controversy surrounds the appropriate size. Many influential citizens want a large center that would be a show case for the area, but the mayor feels if demand does not support such a center, the community will lose a large amount of money. To provide structure for the decision FFOCES, the council narrowed the building alternativE to three sizes: small, medium, and large. Everybody agreed that the critical factor in choosing the best size is the number of people who will want to use the new facility. A regional planning consuitant provided demand estimates under three scenarios: worst case, base case, and best case. The worstcase scenario corresponds to a situation in which tourism drops signicantly; the basuLL case scenario corrponds to a situation in which Lake Placid continua to attract visitors at current levels; and the bestcase scenario corresponds to a significant increase in tourism. The consultant has provided probability assessmenE of 0.10, 0.60, and 0.30 for the worstcase, basecase,r and bestcase scenario respectively. The town council suggested using net cash ow over a fiveyear planning horizon as the criterion for deciding on the bat size. A consultant developed the following projections of net cash flow [in thousands of dollars] for a fiveyear planning horizon. All cosls, including the consulta nt's fee, are included. a. What decision should Lake Placid make using the expected value approach? b. Compute the expected value of perfect information. Do you think it would be worth trying to obtain additional information concerning which scenario is likely to occur? c. Suppose the probability of the worstcase scenario increased to 0.20, the probability of the bestcase scenario decreased to 0.50, and the probability of the basecase scenario remains at 0.30. What effect, if any, would these changes have on the decision recommendation? d. The consultant suggested than an expenditure of $150,000 on a promotional campaign over the planning horizon will effectively reduce the probability of the worstcase scenario to zero. If the campaign can be expected to also increase the probability of the bestcase scenario to 0.40, is it a good investment