Flexicomp is a computer manufacturer that currently makes its computers in California. The manufacturing cost at the California plant is $$300$ per computer. Flexicomp sells the computers for $$1500.$ Its current yearly demand is $5000$ computers. Flexicomp estimates that each year, demand has a $50$ percent chance of increasing $10$ percent from the year before and a $50$ percent chance of remaining the same as the year before. The California facility has a capacity of $5000$ units. Flexicomp is considering two options. The first option is to build a new facility in New York. The new facility will have a capacity of $2000$ and Flexicomp will incur a one time cost of $$1,000,000.$ The manufacturing cost at the new facility will be $$250$ per unit because of updated facilities. The second option is to buy pre$-$assembled computers from Compco when demand goes over $5000.$ The current cost of preassembled computers from Compco is $$700$ per unit. Flexicomp expects Compco to increase its prices each year. Flexicomp estimates that each year there is a $50\%$ chance that the price will increase by $10\%$ or there is a $50\%$ chance that the price will increase by $5\%.$ Use a decision tree to determine which option Flexicomp should use. Consider the expected profits from the current year, and the next two years in your decision making process. Assume a discount factor of $10\%$ over the next two year

For the compco outsourcing scenario there are four distinct possibilities one year into the future and $9$ distinct possibilities two years into the future. You have to enumerate all the possibilities and evalute the net profit for each possibility in the future before finding the current NPV$.$