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Superior Products Inc. is considering two potential equipment alternatives for production of their best selling product line. Option 1 involves proven equipment: Fixed cost investment of $800,000 Variable cost of $45/unit. Option 2 involves developmental technology: Fixed cost investment of $1,200,000 Variable cost of $30/unit. 1. The marketing department has made the following sales estimates: Favorable: 40,000 units sold at $80/unit with a 60% probability. Unfavorable: 15,000 units sold at $80/unit with a 40% probability. Draw a decision tree and calculate the Expected Monetary Value (EMV). Which Option would you recommend based on this decision tree analysis? Please show work. 2.The Finance Division agrees with the sales estimates of the Marketing Division. However, Finance would like some sensitivity analysis include by using the following probabilities: Favorable: 40,000 units sold at $80/unit with a 30% probability. Unfavorable: 15, 000 units sold at $80/unit with a 70% probability. Do not redraw the Decision Tree. Would these new probabilities change your recommendation? Why or Why not? Please show your work.
The franchise fee is %u201Cthe one-time payment made to become a franchisee%u201D (Hatten, 2009, p. 142). Hatten also stated that %u201Csome agreements require you to have a percen
The wtos intl trade statistics is an annual report that provides comprehensive comparable updated statistics on trade in merchandise and commercial services. This report allows for
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