Question: Decision tree question The Question asks if they should build a small, medium, or large facility. Let me know if you need anything else clarified.

Decision tree question

The Question asks if they should build a small, medium, or large facility. Let me know if you need anything else clarified.

Decision tree question The Question asks if they should build a small,

medium, or large facility. Let me know if you need anything else

clarified. A small facility is expected to earn an after-tax net present

value of just $14,000 if demand is low. If demand is average,

A small facility is expected to earn an after-tax net present value of just $14,000 if demand is low. If demand is average, the small facility is expected to earn $15,000; it can be increased to medium size to earn a net present value of $80,000. If demand is high, the small facility is expected to earn $25,000 and can be expanded to medium size to earn $80,000 or to large size to earn $165,000. A medium-sized facility is expected to lose an estimated $25,000 if demand is low and earn $90,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $100,000; it can be expanded to a large size for a net payoff of $125,000. f a large facility is built and demand is high, earnings are expected to be $180,000. If demand is average for the large facility, the present value is expected to be $80,000; if demand is low, the facility is expected to lose $80,000 Choose the correct decision tree below. Note that each payoff is given in thousands ($000). A. B. c. D. () () () What should management do to achieve the highest expected payoff? The management should build a in order to achieve the highest expected payoff of $ . (Enter your response as a whole number.)

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