Ling Li of Li Windows, Inc. is considering making a change in the material the firm uses for panes in its residential window line. The new material has a slight mirror attribute that assists in reflecting ultra-violet light and restricts the transmission of heat. The new material will raise the cost of a standard window by$3.76. The current window is in the mature stage of the life cycle and with no modifications, Li has estimated that sales of the window line will be 240,000 units per year for the next 5 years with a probability of 0.3, and has a 0.70 probability of selling180,000 units per year over the five years. The standard profit margin of a window unit is $45. With the new glass material, the selling price per unit can be increased by $5 (but with the addedcost, the net increase in profit margin =(($45plus$5)minus$3.76)= $46.24). However, Li estimates that the demand for the newly designed window will be 210,000 units with a probability of 0.6, and that there will be a 0.4 probability of sales of 150,000 units. Choose the correct decision tree that corresponds with the decision made by Ling Li.
A. No change New material High demand High demand Low demand Low demand
B. No change New material High demand Low demand
C. No change New material High demand Low demand
D. No change New material High demand High demand Low demand Low demand
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