# Test: Final Exam Time Remaining: 0221:23 Submit Test This Question: 9 pts 90124 (0 complete) ? This

Test: Final Exam Time Remaining: 0221:23 Submit Test This Question: 9 pts 90124 (0 complete) ▼ This Test: 105 pts possible F. J. Brewerton Retailers, Inc., must decide whether to build a smal or a large facility at a new location in Omaha Demand at the location well either be low or high, with probabilities 0 6 and 04, respectivelyM Brewerton builds a small facility and demand proves to be high, he then has the option of expanding the facility If a small facility is built and demand proves to be high, and then the redailer expands the payoff is \$260,000. if a small facility is built and demand proves to be high, but Brewerton then decides not to expand the tacility, the payot is \$243,000 f a small facility is built and demand proves to be low, then there is no option to expand and the payoffis \$240,000. if a large taclity is built and demand proves to be low. Byewerton then has the option of stimulating demand through local advertising If he does not exercise this option, then the payoff is \$40,000, it he does exercise the adverssing option, then the response to advertising will ether be modest or sizable, with probablties of 0 5 and 0 5 advertising is needed and the payoft is \$900,000 tively i&#39; the response s modest te payer s t40000·ts stable, the payof is S230000 Finly, talage teltys bullad demand preve, to be high he, no a) What should Brewerton do to maximize his expected paryoftf? Choose the comect decision tree below. Note that all payoffs are in \$1,000s OA. ○B. 240 240 low (0 6) ow (0.6) expandー -260 260 Click to select your answers). End