Toronto West Development Corporation TWDC purchased land not far from the intersection of Bloor Street West and Kipling Avenue. The top managers of TWDC, however, have different opinions on how this land can be used. Eventually, TWDC commissioned prelim Rise Condo; Mid-Rise Apartments; Retirement Homes. Also, it is recognized that the financial success of the project depends on the situation on the real estate market, Strong Demand or Weak Demand. The TWDC expectations are summarized in the following table (payoffs are in $millions). States of Nature Decision Alternatives Weak Strong Demand Demand High-Rise Condo Mid-Rise 11 Apartments Retirement Homes 21 -6 Originally, TWDC specialists counted on 0.66 probability of strong demand. Simple Decision Tree Part (a) Suppose that you need to construct a simple decision tree that shows the logical sequence of the decision problem. Select the correct sketch of the decision tree based on the information above. Note that P(S)=probability of strong demand, P(W)=probability of weak demand. Also we use the following notations: P1=Payoff 1, P2=Payoff 2, Pg=Payoff 3, P4=Payoff 4 , P5=Payoff 5, Pg=Payoff 6 . OP(S) = 0.66 , P(W) = 0.34, P1 = 6, P2 = 4, P3 = 11, PA = 4, Ps = 21 , P6 = - 6 High-Rise Condo Payoff 1 P(S) Strong Mid-Rise Apartments Payoff 2 Retirement Homes Payoff 3 -0 High-Rise Condo Payoff 4 P(W) Weak Mid-Rise Apartments Payoff 5 Retirement Homes Payoff 6 OP(S) = 0.66 , P(W) = 0, P1 = 6, P2 = 4, P3 = 11, PA = 4, P5 = 21 , P6 = - 6 High-Rise Condo High-Rise Condo Payoff 1 Payoff 4 Strong O Mid-Rise Apartments Weak Mid-Rise Apartments Payoff 2 Payoff 5 Retirement Homes Retirement Homes Payoff 3 Payoff 6 OP(S) = 0.34, P(W) = 0.66, P1 = 6, P2 = 11 , P3 = 21 , PA = 4, Ps = 4, P6 = - 6 P(S) Strong High-Rise Condo Payoff 1 P(W) Weak Payoff 2 P(S Strong Payoff 3 Mid-Rise Apartments P(W Weak Payoff 4 P(S) Strong Payoff 5 Retirement Homes P(W) Weak Payoff 6 OP(S) = 0.66 , P(W) = 0.34, P1 = 6, P2 = 4, P3 = 11, PA = 4, Ps = 21 , P6 = - 6 P(S) Strong High-Rise Condo Payoff 1 P(W Weak Payoff 2 P(S) Strong Mid-Rise Apartments Payoff 3 P(W) Weak Payoff 4 P(S) Strong Payoff 5 Retirement Homes P(W) Weak Payoff 6 ONone of the above. (b) Using the sketch from the previous question and TreePlan, construct a simple decision tree. Based on the simple decision tree answer the following questions. Keep 2 decimal places in the EMV answers . Find the expected monetary value for High-Rise Condo decision. EMV(High-Rise Condo) = . Find the expected monetary value for Mid-Rise Apartments decision. EMV( Mid-Rise Apartments) = . Find the expected monetary value for Retirement Homes decision. EMV( Retirement Homes) = (c) Using the simple decision tree determine the best decision policy. O Support Retirement Homes project. O Construct High-Rise Condo if the demand is strong. Go ahead with Mid-Rise Apartments project. O Construct High-Rise Condo. Go ahead with Mid-Rise Apartments project if the demand is strong. O Support Retirement Homes project if the demand is strong. None of the above