Wednesday Afternoon is a chain of stores that specialize in selling close-out merchandise. The firm has the opportunity to acquire either three, six, nine, or twelve store leases from the bankrupt In...

Wednesday Afternoon is a chain of stores that specialize in selling close-out merchandise. The firm has the opportunity to acquire either three, six, nine, or twelve store leases from the bankrupt In Focus chain. Each lease runs five years, and the profitability of these leases depends on the economy over this time period. The economists at Wednesday Afternoon believe that the average growth rate in GNP will be either 2, 3, 4, 5, or 6% per annum during the five-year period, with probabilities .1, .2, .2, .4, and .1, respectively. The following tables give the expected return to Wednesday Afternoon over the next five years (in $ 100,000s) as well as the utility values for these amounts.

Determine the number of leases the company should acquire if its objective is to:

a. Maximize expected profit over the next five years.

b. Maximize expected utility over the next five years.