A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being 0.40, 0.35, and 0.25, respectively.A small facility is expected to earn an after-tax net present value of just $13,000 if demand is low. If demand is average, the small facility is expected to earn $15,000; it can be increased to medium size to earn a net present value of $30,000. If demand is high, the small facility is expected to earn $25,000 and can be expanded to medium size to earn $50,000 or to large size to earn $100,000.A medium-sized facility is expected to lose an estimated $50,000 if demand is low and earn $100,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $125,000; it can be expanded to a large size for a net payoff of $175,000.If a large facility is built and demand is high, earnings are expected to be $180,000. If demand is average for the large facility, the present value is expected to be $80,000; if demand is low, the facility is expected to lose $70,000.Choose the correct decision tree below. Note that each payoff is given in thousands ($000).What should management do to achieve the highest expected pay off? The management should build a (small facility, medium facility, large facility) in order to achieve the highest expected payoffoff of $_____. (Enter your response as a whole number.) Choose the correct decision tree below. Note that each payoff is given in thousands (S000)OB.OA.Expand to g s175High 0 25 s180Avg 0.35 $80High 0 25Avg 0.35 s80Low 0.40-S7ODo nothing$125- $70High 0 25 s180Avg 0 35 s100Low 0.40Low 0.40Expand to Irg s175-$70LargeLargeHigh 0 25Avg 0.35 s100Do nothing$125Expand to irg s100Expand to mede50-$50Low 0 40- $50Expand to IrgExpand to medesoDo nothingExpand to medeanDo nothing$100High 0 25High 0.25Do nothing$25Expand to mede"$30Do nothingSmallSmallAvg 0 35Low 0 40 513$25Avg 0.35Low 0.40 $13$30-$13$15$15OD.OC.High 0.40 5180Avg 0.35 s80High 0 25 s180Avg 0 35 s80Low 0252029 570Expand to g s175Expand to Irg S175LargeHigh 0.40hledAvg 0.35 s100Low 025 s50Low 0.40Large-$70Do nothing s125High 0 25hvedAvg 0.35 s100Expand to Irg S100$100Expand to medg50Do nothingDo nothing$125Low 0.40High 0.40$50Expand to Irgs100Expand to medg50SmallHigh 0.25$25Expand to medAvg 0.35Low 0 25 513SmallDo nothing$25Expand to meds30Do nothing$15Avg 0.35Low 0.40 $13Do nothing$15What should management do to achieve the highest expected payoff?in order to achieve the highest expected payoff of S (Enter your response as a whole number)The management should build a Amanager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilties being 0.40, 0.35, and 0 25, respectivelyA small facility is expected to ean an after-tax net present value of just $13,000 if demand is low. If demand is average, the small facility is expected to earn $15,000, it can be increased to medium size to eam a net present value of $30,000. If demand is high, the small facility is expected to earn $25,000 and can beexpanded to medium size to eam $50,000 or to large size to eam $100,000.AA medium-sized facility is expected to lose an estimated $50,000 if demand is low and eam $100,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $125,000; it can be expanded to a large size for a net payoff of $175,000If a large facility is built and demand is high, earnings are expected to be $180,000. If demand is average for the large facility, the present value is expected to be $80,000; if demand is low, the facility is expected to lose S70,000.Choose the correct decision tree below. Note that each payoff is given in thousands (S000).O AOB.High 0 25Avg 0.35 580Expand to g S175Do nothingHigh 0.25 s180$125Avg 0.35$80Low 0.40 -S70Low 0.40Expand to lrg S175- $70High 0 25 5180MedAvg 0.35LargeLargeHigh 0 25Avg 0.35 $100$100Low 0.40/MeDo nothing$125Expand to Irg$100Expand to medeso"$50Low 0.40-$50-$50Expand to IrgS100Expand to meds50High 0.25High 0.25Do nothing$25Expand to mede30SmallSmallDo nothing$25Expand to medAvg 035Low 0 40 s13Do nothingAvg 0 35$13$302415Low 0 40s1Do nothing$15OD.OC.High 0.25 s180Avg 0 35 s80$80Low 0.40High 0 40 s180Avg 0.35 s80LOw 025 570Expand to irgs175LargeExpand to ig $175High 0 40$70Do nothingMedAvg 0 35s100$125Expand to g s100Expand to medes0LargeHigh 0 25hted Avg 0.35 s100Low 0.40$100Low 025 s50$50Do nothing$125High 0.40"S50$25Expand to medean$430-$50Expand to IrgS100SmallDo nothingExpand to medg50Do nothing$25Expand to meds30High 0.25Avg 0 35SmallNextAvg 0.351210 AM33F Clear AODa C2/2022

Question

A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being 0.40, 0.35, and 0.25, respectively.A small facility is expected to earn an after-tax net present value of just $13,000 if demand is low. If demand is average, the small facility is expected to earn $15,000; it can be increased to medium size to earn a net present value of $30,000. If demand is high, the small facility is expected to earn $25,000 and can be expanded to medium size to earn $50,000 or to large size to earn $100,000.A medium-sized facility is expected to lose an estimated $50,000 if demand is low and earn $100,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $125,000; it can be expanded to a large size for a net payoff of $175,000.If a large facility is built and demand is high, earnings are expected to be $180,000. If demand is average for the large facility, the present value is expected to be $80,000; if demand is low, the facility is expected to lose $70,000.Choose the correct decision tree below. Note that each payoff is given in thousands ($000).What should management do to achieve the highest expected pay off? The management should build a (small facility, medium facility, large facility) in order to achieve the highest expected payoffoff of $_____. (Enter your response as a whole number.￼) Choose the correct decision tree below. Note that each payoff is given in thousands (S000)OB.OA.Expand to g s175High 0 25 s180Avg 0.35 $80High 0 25Avg 0.35 s80Low 0.40-S7ODo nothing$125- $70High 0 25 s180Avg 0 35 s100Low 0.40Low 0.40Expand to Irg s175-$70LargeLargeHigh 0 25Avg 0.35 s100Do nothing$125Expand to irg s100Expand to mede50-$50Low 0 40- $50Expand to IrgExpand to medesoDo nothingExpand to medeanDo nothing$100High 0 25High 0.25Do nothing$25Expand to mede&#34;$30Do nothingSmallSmallAvg 0 35Low 0 40 513$25Avg 0.35Low 0.40 $13$30-$13$15$15OD.OC.High 0.40 5180Avg 0.35 s80High 0 25 s180Avg 0 35 s80Low 0252029 570Expand to g s175Expand to Irg S175LargeHigh 0.40hledAvg 0.35 s100Low 025 s50Low 0.40Large-$70Do nothing s125High 0 25hvedAvg 0.35 s100Expand to Irg S100$100Expand to medg50Do nothingDo nothing$125Low 0.40High 0.40$50Expand to Irgs100Expand to medg50SmallHigh 0.25$25Expand to medAvg 0.35Low 0 25 513SmallDo nothing$25Expand to meds30Do nothing$15Avg 0.35Low 0.40 $13Do nothing$15What should management do to achieve the highest expected payoff?in order to achieve the highest expected payoff of S (Enter your response as a whole number)The management should build a Amanager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilties being 0.40, 0.35, and 0 25, respectivelyA small facility is expected to ean an after-tax net present value of just $13,000 if demand is low. If demand is average, the small facility is expected to earn $15,000, it can be increased to medium size to eam a net present value of $30,000. If demand is high, the small facility is expected to earn $25,000 and can beexpanded to medium size to eam $50,000 or to large size to eam $100,000.AA medium-sized facility is expected to lose an estimated $50,000 if demand is low and eam $100,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $125,000; it can be expanded to a large size for a net payoff of $175,000If a large facility is built and demand is high, earnings are expected to be $180,000. If demand is average for the large facility, the present value is expected to be $80,000; if demand is low, the facility is expected to lose S70,000.Choose the correct decision tree below. Note that each payoff is given in thousands (S000).O AOB.High 0 25Avg 0.35 580Expand to g S175Do nothingHigh 0.25 s180$125Avg 0.35$80Low 0.40 -S70Low 0.40Expand to lrg S175- $70High 0 25 5180MedAvg 0.35LargeLargeHigh 0 25Avg 0.35 $100$100Low 0.40/MeDo nothing$125Expand to Irg$100Expand to medeso&#34;$50Low 0.40-$50-$50Expand to IrgS100Expand to meds50High 0.25High 0.25Do nothing$25Expand to mede30SmallSmallDo nothing$25Expand to medAvg 035Low 0 40 s13Do nothingAvg 0 35$13$302415Low 0 40s1Do nothing$15OD.OC.High 0.25 s180Avg 0 35 s80$80Low 0.40High 0 40 s180Avg 0.35 s80LOw 025 570Expand to irgs175LargeExpand to ig $175High 0 40$70Do nothingMedAvg 0 35s100$125Expand to g s100Expand to medes0LargeHigh 0 25hted Avg 0.35 s100Low 0.40$100Low 025 s50$50Do nothing$125High 0.40&#34;S50$25Expand to medean$430-$50Expand to IrgS100SmallDo nothingExpand to medg50Do nothing$25Expand to meds30High 0.25Avg 0 35SmallNextAvg 0.351210 AM33F Clear AODa C2/2022

Accepted Answer

Option (A): It contains all the nodes with decision nodes. Hence, option (A) is incorrect.
Option…