Now develop a construction strategy for Sunray Co. assuming that the demand can be high, medium,...

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Now develop a construction strategy for Sunray Co. assuming that the demand can be high, medium, and low with probabilities .7, .2, and .1 respectively. Expansion of a small plant will occur only if demand in the first 2 years is high. Table 2 provides estimates of the annual income. Ignore the time value for money. Table 2: Data for Sunray Co.: case 2 Annual income estimates (in £1,000) High demand 1000 Alternative Full-size plant now Small-size plant now Expanded plant in 2 years Medium demand 500 280 Low demand 300 400 150 900 600 200 Now develop a construction strategy for Sunray Co. assuming that the demand can be high, medium, and low with probabilities .7, .2, and .1 respectively. Expansion of a small plant will occur only if demand in the first 2 years is high. Table 2 provides estimates of the annual income. Ignore the time value for money. Table 2: Data for Sunray Co.: case 2 Annual income estimates (in £1,000) High demand 1000 Alternative Full-size plant now Small-size plant now Expanded plant in 2 years Medium demand 500 280 Low demand 300 400 150 900 600 200

Answer rating: 100% (QA)

Answer Solution iThe per year profit is for high demand in full capacity case is 100... View the full answer