Jerry is thinking of opening a bicycle shop in his hometown. Jerry can open a small shop, a large shop, or no shop at all. The profits will depend on the size of the shop and whether the market is favorable or unfavorable for his products. There is a 50-50 chance that the market is favorable.If Jerry builds a large bicycle shop, then he will earn $60,000 if the market is favorable. If the market is unfavorable, then he will lose $40,000.If Jerry builds a small bicycle shop, then he will earn $30,000 if the market is favorable. If the market is unfavorable, then he will lose $10,000.Jerry can hire his old marketing professor for $5,000 for the marketing research/study.There is a 0.6 probability that the research is favorable. There is a 0.9 probability that the market will be favorable given a favorable outcome from the study. There is only a 0.12 probability of a favorable market if the study is not favorable.Create a decision tree for this problem. a. What is the EMV for the initial decision in the tree?
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