Marriott Hotels is planning to build a new hotel property in a suburb of Portland, Oregon. The company is considering one of four sizes of hotels to construct: 120 rooms, 200 rooms, 260 rooms, or 320...

Marriott Hotels is planning to build a new hotel property in a suburb of Portland, Oregon. The company is considering one of four sizes of hotels to construct: 120 rooms, 200 rooms, 260 rooms, or 320 rooms. Construction will take one year to complete. Profitability of the property will, to a great extent, depend on whether an industrial park or a university is developed in the area. The following table gives the long-term present worth profit (in $100,000s) based on the size of hotel constructed and the development that could take place in the area.

Marriott management estimates that there is a 60% chance that an industrial park will be developed and a 30% chance that the university will be developed. The two developments are believed to be independent of each other. Determine the optimal size hotel Marriott should construct based on the expected value criterion.