Problem 1: What-if and Goal-seeking analysis.George is planning to set up a new hair salon in a trendy inner city Melbourne suburb. Georgeestimates that his fixed annual costs (which include rent, loan interest, electricity expenses, etc.) willbe $150,000. He is planning on employing a total of five hair stylists, who will each work 1,600 hoursper year. He plans to charge a fixed price for haircuts ($35 for men, $60 for women), and estimatesthat 65% of his customers will be women. He is having difficulty determining the pay structure forthe hair stylists, and is considering the following three possibilities:Scenario 1: Fixed hourly rate of $40 per hour.Scenario 2: Fixed hourly rate of $20 per hour + a commission on each haircut of 20% of thecost of the haircut.Scenario 3: No fixed hourly rate, but a commission on each haircut of 30% of the cost of thehaircut.George would like to know the following: Under each of the above scenarios, what would be the break-even point in the number ofhaircuts; i.e., how many haircuts must the salon deliver in order to just cover total costs?In Scenario 2 (i.e., fixed hourly rate + commission), assuming the salon would deliver a totalof 5,000 hairstyles for the year, what would the commission need to be in order for the totalcosts to be the same as per Scenario 1?Create an Excel spreadsheet that George can use as a decision support tool to answer his questions.The spreadsheet should be designed such that George would be able to use the spreadsheet withoutany additional documentation.What to submit:A written report that describes how you solved the problem, and the information that Georgerequires. The report should contain screen shots of the spreadsheet that you constructed to solvethe problem: one screen shot showing the spreadsheet without formulas showing, and anothershowing the spreadsheet formulas (see Appendix B for directions on how to display formulas inExcel). Make sure that your report shows how you used your spreadsheet to perform the goalseeking.The screen shots should include row and column headers.Marking criteria:Completeness and correctness of your solution.Have all questions been answered? Is it clear how you arrived at your answers? Are youranswers correct?Problem 2: Decision analysis using decision tables (10 marks)Maddy and Alex are old school friends, and are now undertaking undergraduate degrees in businessand IT respectively. In an attempt to make some extra money, they are thinking of setting up atutoring agency, through which they will provide tutoring services to students in their last two yearsof secondary schooling. If their plan goes ahead, they will need to rent some office space in order todeliver these services.They have identified three strategies. Strategy 1 is to rent a fairly expensive office in a location inclose proximity to many schools. They estimate that in a favourable market, they would be able toobtain a net profit of $10,000 over two years; but if the market was unfavourable, they could lose$8,000. Strategy 2 is to rent a more modest office space. Under a favourable market they could get areturn of $8,000, but in an unfavourable market would lose $4,000. They estimate that there is a50% chance that the market is favourable, and therefore a 50% chance that it is unfavourable. Thethird strategy is to do nothing; i.e., not set up the business. Maddy and Alex have very differentapproaches when it comes to risk. Whereas Maddy has an optimistic predisposition and likes to takerisks, Alex always tries to avoid risk.Provide answers, with justifications, for each of the following questions:a. What would Maddy's decision be? Why?b. What would Alex's decision be? Why?c. What would their decision be if they were to choose the alternative with the greatestexpected value? Show all calculations, and justify your answer.