The owners of Sweet-tooth Bakery have determined that they need to expand their facility in order to meet their increased demand for baked goods. The decision is whether to expand now with a large facility or expand small with the possibility of having to expand again in ve years. The owners have estimated the following chances for demand:

The likelihood of demand being high is 0.70.

The likelihood of demand being low is 0.30.

Prots for each alternative have been estimated as follows:

Large expansion has an estimated protability of either $80,000 or $50,000, depending on whether demand turns out to be high or low.

Small expansion has a protability of $40,000, assuming demand is low.

Small expansion with an occurrence of high demand would require considering whether to expand further. If the bakery expands at this point, the prot-ability is to be $50,000.

(a) Draw a decision tree showing the decisions, chance events, and their probabilities, as well as the protability of outcomes.

(b) Solve the decision tree and decide what the bakery should do.