Question: You are deciding between continuing to buy preassembled bikes and manufacturing your bikes. There are a lot of changes happening in the economy and you

You are deciding between continuing to buy

You are deciding between continuing to buy preassembled bikes and manufacturing your bikes. There are a lot of changes happening in the economy and you believe there is a 20% chance of a strong outlook and 50% flat and 30% weak over the next 2 years. You are committed to selling 500 bikes annually. When the economy is strong you can sell at full price, but you will need to apply different levels of discounts depending on the economy. Option 1: Preassembled bike profit ranges from $500 in a strong economy, $425 if the economy is flat and $200 when weak. 500 bikes each in 2023 and 2024. Option 2: You will buy components and assemble them yourself. You need to invest $100,000 in remodeling a space to do the work; however, earn $50 more profit for each bike ( $550, $475, and $250 ). (Same volume as above) What do you recommend? Use a decision tree to explain which option is the most profitable after 2 years

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