Question: A company is considering three options; do nothing, build a small factory, or build a large factory. A small factory cost $10M and the company

A company is considering three options; do
A company is considering three options; do nothing, build a small factory, or build a large factory. A small factory cost $10M and the company expects it would generate additional discounted revenues of $13M in a growing economy and $5M in a stagnant economy. A large factory cost $12M and the company expects it would generate additional discounted revenues of $17M in a growing economy and $5M in a stagnant economy. Your economist has estimated the probability of a growing economy is 0.4 and a stagnant economy at 0.6. Using the expected value criterion, which option should the company pursue? do nothing O it doesn't matter, all three options are the same o build the large factory o build the small factory

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