UniversityEssayServices

A firm that plans to expand its product line must decide whether to build a small or large facility to produce the new product. If it builds a small facility and demand turns out to be low, the net present value after deducting for building costs will be P400, 000. If demand turns out to be high, the firm can either maintain the small facility or expand it. Expansion would have a net present value P300, 000, and maintaining the small facility would have a net present value of P50,000. If a large facility is built and demand is high, the estimated net present value is P800, 000. If demand turns out low, the present value will be (P10, 000). The probability that demand will be high is 60% and the probability of low demand is estimated to be 40%. Analyze the problem above using a tree diagram/decision tree.

Share this :
Share on facebook
Share on twitter
Share on whatsapp
Share on pinterest

Found something interesting ?

• On-time delivery guarantee
• PhD-level professional writers
• Free Plagiarism Report

• 100% money-back guarantee
• Absolute Privacy & Confidentiality
• High Quality custom-written papers

Related Model Questions

Feel free to peruse our college and university model questions. If any our our assignment tasks interests you, click to place your order. Every paper is written by our professional essay writers from scratch to avoid plagiarism. We guarantee highest quality of work besides delivering your paper on time.

Special Offer

Use the Coupon Code: SAVE25 to save 25% on your next order.
SAVE