Use Decision tree to find answers.

Last year, a commercial builder, Kim Peters, located a piece of property that she would like to buy and eventually build on. The land is currently zoned for four homes per acre, but she is planning to request new zoning. What Kim ultimately decides to build on the land depends on approval of zoning requests and your analysis of this problem to advise her. With her input and your help, the decision process has been reduced to the following costs, alternatives, and probabilities: - Cost of land: $5 million. - Probability of rezoning: 0.40 If the land is rezoned, Kim must decide whether to build a shopping center or 1,200 apartments that the tentative plan shows would be possible. Also, land rezoning will cost the builder an additional fee for new roads, lighting, and so on, of $1million. If Kim builds a shopping center, she places probabilities on the profits as follows: - There is a 80 percent chance that she can sell the shopping center to a large department store chain for $6 million over her construction cost excluding the cost of the land - There is a 20 percent chance that she can sell it to an insurance company for $3 million over her construction cost (also excluding the cost of the land). If, instead of the shopping center, she decides to build the 1,200 apartments, she places probabilities on the profits as follows: - There is a 60 percent chance that she can sell the apartments to a real estate investment corporation for $2,300 each over her construction cost - excluding the cost of the land. - There is a 40 percent chance that she can get $2,250 each over her construction cost - excluding the cost of the land. However, if the land is not rezoned, Kim will comply with the existing zoning restrictions and simply build 500 homes, on which she expects to make $4,200 over the construction cost on each one - excluding the cost of land. a. What is the expected value for the rezoned shopping center including paying for the fees for the upgrade costs? (Do not round your intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Expected value $ million b. What is the expected value for the rezoned apartments including paying for the fees for the upgrade costs? (Do not round your intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Expected value $ million c. If the land is rezoned, what should the contractor decide? Build shopping center Build apartments d. What is the expected revenue, if the land is not rezoned? (Do not round your intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Expected revenue $ million e. What is the expected net profit of entire project (don't forget to take into account the cost of the land)? (Do not round your intermediate calculations. Enter your answers in millions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Expected net profit $ million