Question: Your factory has an old machine which is currently producing excessive bad parts. You have to decide whether to buy a new machine, fix the

Your factory has an old machine which is currently producing excessive bad parts. You have to decide whether to buy a new machine, fix the machine or to do nothing. Each of your choices has financial consequences. The market is a big concern and your market analysts predicted a 60% chance that the market will rise and a 40% chance that it will fall.
If you do nothing you will lose R200000.00 if the market rises and make a profit of R100000.00 if it falls. If you buy a new machine and the market rises you will make a profit of R500000.00 but if the market falls you will lose R300000.00. If you decide to fix the machine the profit will be R300000.00 only if the market rises but you will lose R20000.00 if it falls.Your factory has an old machine which is currently producing excessive bad parts. You have to decide whether to buy a new machine, fix the machine or to do nothing. Each of your choices has financial consequences. The market is a big concern and your market analysts predicted a 60% chance that the market will rise and a 40% chance that it will fall.
If you do nothing you will lose R200000.00 if the market rises and make a profit of R100000.00 if it falls. If you buy a new machine and the market rises you will make a profit of R500000.00 but if the market falls you will lose R300000.00. If you decide to fix the machine the profit will be R300000.00 only if the market rises but you will lose R20000.00 if it falls.Your factory has an old machine which is currently producing excessive bad parts. You have to decide whether to buy a new machine, fix the machine or to do nothing. Each of your choices has financial consequences. The market is a big concern and your market analysts predicted a 60% chance that the market will rise and a 40% chance that it will fall.
If you do nothing you will lose R200000.00 if the market rises and make a profit of R100000.00 if it falls. If you buy a new machine and the market rises you will make a profit of R500000.00 but if the market falls you will lose R300000.00. If you decide to fix the machine the profit will be R300000.00 only if the market rises but you will lose R20000.00 if it falls.

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