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The Tire Center is considering opening a branch office on the west coast. Under normal...

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Finance

The Tire Center is considering opening a branch office on the west coast. Under normal economic conditions, with a 45% probability of occurring, the tire center can expect to earn a net income of $50,000 per year. In a mini-recession, at 25% probability, The Tire Center will earn $20,000. In a severe recession, at a 20% probability, They will lose $10,000. There is also a slight probability (10%) that The Tire Center will lose $300,000 if the expansion fails and the branch office must be closed. Should The Tire Center open a branch office in California?

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