decision tree? probability?

NewSource Inc. uses natural gas in its production-processing operations.  Neighboring companies in its upstate Ohio area have successfully drilled for gas on their premises, and NewSource is considering following suit.  Their initial expenditure would be drilling, which would cost $80,000.  If they strike gas, they would have to spend an additional $50,000 to cap the well and provide for the necessary hardware and control equipment.  At the current price of natural gas, if the well is successful it will have a value of $750,000.  However, if the price of gas rises to double its current value, a successful well will be worth $1,500,000.  The company thinks its chance of finding gas is thirty percent; it also believes that there is a 50 percent chance that the price of gas will double.  What should the company do?

I don't know how to figure this out. Can you help please?


These are the techniques and applications we have studied:
-Confidence intervals and hypothesis testing
-Decision trees (and their use in solving managerial problems),
-Critical fractile analysis (and its use in determining optimal demand levels),
-Analysis of variance/ANOVA (and its use in understanding differences between group means),
-Chi-square (cross tabs/contingency table) analysis (and its use in determining differences between group proportions),
-Regression, single and multiple (and its use in understanding relationships between dependent and independent (explanatory) variables), and
-Optimization modeling (and its use in determining the best solution given a set of constraint).

Various general skills:
-Sampling techniques and issues
-Probability, conditional probability, expected value, and time value of money,
-Probability distributions and descriptive statistics

...but nothing.... seems to fit