Please solve using Excel

Question 2: You are the CFO of The Maxim Group Inc. As part of your planning process, you are considering outsourcing production of a small component (the widget) of the company's main product. You have created the following scenario analysis for next year's production: Outcome Probability Widget Units Needed Exceptional 35% 1,000,000 Average 50% 800,000 Poor 15% 700,000 IF the company continues to manufacture this product "in-house, the variable cost per unit is $15.33. The fixed costs are $10M in total. ALTERNATIVELY, the company could outsource production of the widget, and the new supplier has quoted a price of $27 per widget. Based on the above facts, and ignoring other more esoteric concepts as supply chain security, should the company outsource production of the widget? Why? NOTE: this is a tough question - not that the calculations are hard, the insight is difficult. As a hint, and this may give too much away, do a thought experiment. Imagine you were running a business, and a supplier of an important part your business uses offers you two potential deals for next year the first, buy all supplied parts for $100 each, no matter what happens. Alternatively, the second, if the economy is great, pay $120 each, if normal $100, and if poor $50. You do the math in your head, applying your own subjective probabilities to each, and estimate the average cost will be $140. Which do you choose I think I would pay $120 for certain rather than an average of $140 but possibly more possibly less! (5 points)