Question: would be lost. however. tecause the to buy one machine or two, If only one machine is purchased and demand proves to be excessive, the
would be lost. however. tecause the to buy one machine or two, If only one machine is purchased and demand proves to be excessive, the secend machine can be purchased later. Some sales. probabiligy of lovecemand is estimased to be 0.20 and that of high tye of machine is six months. In addiben, the cost per machine will be lower if both machines are purchased at the same time. The $170,000 if demand is high If one machine is purchased and demand is low, the NPV is 5100,000 . If demand is high, the manager has three options: (1) doing nothing. which has an NPV of $110,000 : (2) subcontracting. with. an NPV of $150,000; and (3) buying the second machine, with an NPV of $120,000 a. Choose the correct decsion tree for this problem. Nole that each payell is given in thousands of dollars
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