Disco Technology Inc. (a.k.a. Disco Tech) plans to launch a new line of consumer entertainment products, but is concerned that they will not have the necessary labor force and facilities to launch the products this year. If Disco Tech uses their owned manufacturing facilities, there is only a 20% probability that they will launch the products this year and be first to market and 80% probability they will be 2^nd to market. However, it they outsource the manufacturing, there is an 80% probability that they will be first to market and only 20% probability they will be 2^nd to market. If Disco Tech is first to market, they will earn $10M in profits while they will only earn $2M in profits if they are second to market. It will cost the company $5M to outsource the manufacturing. Using simple cash-flow analysis (and ignoring any time value of money or taxes), should they outsource manufacturing or handle the manufacturing using their own facilities?

Please complete the following activities and questions, then upload to Blackboard: 1. Create the Payout Matrix and complete the calculations: 2. Recommendation based on Expected Outcome Value? Why