(Solved): (a) It the probability that the rezoning will be approved is \( 0.5 \), what decision is recommenc ...

(a) It the probability that the rezoning will be approved is \( 0.5 \), what decision is recommenced? Recommended Decisica: What is the expected profit? Enter your answer in dollars. Foe example, an answer of \( \$ 200 \) thougands shauld be entered as 200 , DDD. residents. Probabilities are as follews: Let \( H= \) High resistance ta rezoning \( L= \) Low resistance to rezoning \[ \begin{array}{l} P(K)=0.55 \quad P\left(s_{2} \mid H\right)=0.16 \quad P\left(s_{2} \mid H\right)=0.84 \\ P(L)=0.45 P\left(s_{1} \mid L\right)=0.85 P\left(S_{2} \mid L\right)=0.15 \end{array} \] What is the optimal decision strategy if the investor uses the option period to leam more about the resistance from area residents before making the purchase decision? High resistance: Low reslstance: (c) If the option will cost the investor an additional 510,000 , should the investor purchase the option? The investor purchase this option, as the payoif of the investing in it is than \( \$ 10,000 \) dollars. EVSI \( =\$ \) 2