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A retailer is considering building a store large or small mif he builds a large store and the local economy experiences expansion, the firm expects the store to earn a $2.000.000 prote next year. $2.500.000 profit second year, and 52.800.000 profit third year, the builds a large store and the local economy experiences a contraction, the firm expects the store to lose $400.000 next year, close 5300.000 second year, and cose 500.000 third year (1) if he builds a small store and the local economy experiences expansion, the net present value of his profit will be 51.000.000. On the other hand. If local economy experiences contraction the net present value of his loss will be $450.000, Analysts estimate a 30% chance for the local economy to experience an expansion next year chance a 700 chance for contractions Assume profit and loss are realized at the end of the year, the NPV values at po interest rate of som are already calculated for small store alternative, you need to calculate the NPV value first for large store alternative. a. (3 pts) What is the expected monetary value (EMV) of building the large store at an interest rate of tom? (round your response to two decimal places) b. 13 pts) What is the expected monetary value (EMV) of building the small store using net present value (NPV) at an interest rate of 1027 (round your response to two decimal places) c. (4 pts) Should he build a large store or a small store

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