The manager of MusicKing Company is trying to decide whether to move his store to the new Market Shopping Mall or to keep it in its present location. Because of changing economic conditions, the market for stereo equipment may decline, remain the same, or increase during the coming year. The manager estimates the move to Market Shopping Mall will cost $10,000. In addition, the manager assesses market conditions and the associated net profits for the next year under both alternatives (excluding the cost of the move) to be as follows:

Required:
Construct a decision tree for the manager's problem, and calculate the expected value for each alternative. Should the manager choose to move or not?

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Net Profits Expected Do not $(25,000) $(10,000) 40,000 50,000 80,000 Move to Move Probability Mall State of Market Decline Remain the same Increase .2 .3 100,000