Question: Only use excel and show formulas in excel!!! Flexicomp is a computer manufacturer that currently makes its computers in California. The manufacturing cost at the
Only use excel and show formulas in excel!!! Flexicomp is a computer manufacturer that currently makes its computers in California. The manufacturing cost at the California plant is $ per computer. Flexicomp sells the computers for $ Its current yearly demand is computers. Flexicomp estimates that each year, demand has a percent chance of increasing percent from the year before and a percent chance of remaining the same as the year before. The California facility has a capacity of 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 and Flexicomp will incur a one time cost of $ The manufacturing cost at the new facility will be $ per unit because of updated facilities. The second option is to buy preassembled computers from Compco when demand goes over The current cost of preassembled computers from Compco is $ per unit. Flexicomp expects Compco to increase its prices each year. Flexicomp estimates that each year there is a chance that the price will increase by or there is a chance that the price will increase by 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 over the next two years.
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