The senior executives of an oil company are trying to decide whether to drill for oil in a particular field in the Gulf of Mexico. It costs the company $600,000 to drill the selected field. Company executives believe that, if oil is found in this field, its estimated value will be $3,400,000. At present, this oil company believes that there is a 45% chance that the selected field actually contains oil.

a)Suppose that the company can buy perfect information of whether the field has oil. Please calculate EVPI by drawing a complete decision tree via PrecisionTree or manually. Show all the details in an Excel (or PDF) file.

b) Suppose that the company can hire a geologist to conduct a report that contains a recommendation regarding drilling in the selected field. In many similar situations in the past where this geologist has been hired, the geologist has predicted oil on 75% of all fields that have contained oil, and he has predicted no oil on 85% of all fields that have not contained oil. Please calculate EVSI by drawing a complete decision tree via PrecisionTree or manually. Show the probability analysis in a PDF file and the complete decision tree in an Excel (or PDF) file.