I've been trying this problem for hours. Please all parts :)

1 Exeecise 4. 2 3 Expansion decision 4 Demand for your product is expected to increase - but your marketing people are divided as to whether there will 5 be high growth or low growth. The final consensus is that the probability of a high growth is 70% 6 while there is a 30% probability that growth will be low 7 The gain if there is high growth is $5,000,000 8 The gain if there is low growth is $ 1,000,000 9 (these are either/or scenarios - so you either have high growth or low growth) 10 11 value 12 low growth 0.30 $ 1,000,000 13 high growth p 0.70 $ 5,000,000 14 You need to decide whether to invest on an expansioand if so whether to go for a large expansion or a small expansion 15 16 17 18 If you don't expand, you will still capture 70% of the low growth value 19 no expansion gain 70% of low growth 20 no added costs 21 If you invest on a small expansion you capture 100% of the value if there is a low growth // you capture 40% of the value if 22 there is high growth. 23 small expansion cost $ 500,000 24 gain 100% of low growth 25 40% of high growth 20 27 A large investment captures a 100% of value from both high and low growth 28 large expansion gain 100% of high or low growth 29 cost $ 2,000,000 30 31 32 33 GAIN COST P HIGH VALUE $ $ 34 35 NO EXPANSION 36 37 38 LOW HIGH VALUE 39 40 SMALL EXPANSION $ $ 41 LOW 42 43 HIGH LARGE EXPANSION VALUE $ $ LOW 44 45 46 47 48 49 50 51 52