An oil company must decide whether to drill off the coast of Sable Island. It costs $1 million to drill, and if oil is found its value is estimated at $6 million. At present, the company believes there is a 45% chance that oil is present. Before drilling begins, the oil company can hire a geologist for $100,000 to obtain samples and test for oil. There is only about a 60% chance that the geologist will issue a favourable report. Given that the geologist does issue a favourable report, there is an 80% chance that there is oil. Given an unfavourable report, there is a 10% chance that there is oil. Use a decision tree to determine what the oil company should do.
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