Question: What is the best decision based on an expected monetary value criterion? 3. Montreal Hardware Co. is making a make-or-buy decision. The market feedback shows

What is the best decision based on an expected monetary value criterion?

3. Montreal Hardware Co. is making a make-or-buy decision. The market feedback shows that the optimal price for this item is $10 each. If the item is outsourced to Laval Hardware Co, there is virtually no cost other than the $6 per unit that they would pay Laval Hardware Co. Internally, they have two choices. Process A requires an investment of $120,000 for design and equipment, but it results in a $4 per unit cost. Process B requires only a $100,000 investment, but its per unit cost is $5. Regardless of whether the item is subcontracted or produced internally, there is a 50% chance that they will sell 50,000 units, and a 50% chance that they will sell 100,000 units. Draw the decision tree appropriate to the alternatives and outcomes stated. Using the decision tree and EMV, what is their best choice?

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