2. Carrefour is currently considering expanding its capacity to accommodate the growing demand. One of these...

 

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2. Carrefour is currently considering expanding its capacity to accommodate the growing demand. One of these options is to build a nearby store, expand the existing store, or do nothing. The probability that the economy will stabilize is 40%. And 30% for the economic situation to be poor or for 30% to be excellent. The current value has been estimated based on the different expected economic conditions. Expand old storage Build new Do nothing High demand 1,900,000 1,500,000 500,000 Moderate demand 300,000 500,000 0 Low demand 500,000 300,000 100,000 A. Draw a decision tree for this problem. What is the expected net present value for the project? B. Should you invest, and why? 2. Carrefour is currently considering expanding its capacity to accommodate the growing demand. One of these options is to build a nearby store, expand the existing store, or do nothing. The probability that the economy will stabilize is 40%. And 30% for the economic situation to be poor or for 30% to be excellent. The current value has been estimated based on the different expected economic conditions. Expand old storage Build new Do nothing High demand 1,900,000 1,500,000 500,000 Moderate demand 300,000 500,000 0 Low demand 500,000 300,000 100,000 A. Draw a decision tree for this problem. What is the expected net present value for the project? B. Should you invest, and why?

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