$($Inquiries$)$: Chapter $4$ i

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Expando, Inc. is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $$7$million.$If$ demand for new products is low, the company expects to receive $$9$ million in discounted revenues $($present value of future revenues$)$ with the small facility. On the other hand, if demand is high, it expects $$13$ million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $$9$ million. Were demand to be low, the company would expect $$11$ million in discounted revenues with the large plant. If demand is high, the company estimates that the discounted revenues would be $$14$ million. In either case, the probability of demand being high is $0\mathrm{.}20,$ and the probability of it being low is $0\mathrm{.}80.$ Not constructing a new factory would result in no additional revenue being generated because the current factories cannot produce these new products.

a$.$ Calculate the NPV for the following: $($Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Enter your answers in millions rounded to $1$ decimal place.$)$

$\backslash$table$[[$Plans$,$NPV$],[$Small facility,,million$],[$Do nothing,,million$],[$Large facility,,million$]]$