Advanced Placement (AP), 24.04.2021 22:30 shubbs1038a
A supermarket operator must decide whether to build a medium size supermarket or a large supermarket at a new location. Demand at the location can be either average or favourable with estimated probabilities to be 0.35 and 0.65 respectively. If demand is favorable, the store manager may choose to maintain the current size or to expand. The net present value of profits is $623,000 if the firm chooses not to expand. However, if the firm chooses to expand, there is a 75% chance that the net present value of the returns will be 330,000 and 25% chance the estimated net present value of profits will be $610,000. If a medium size supermarket is built and demand is average, there is no reason to expand and the net present value of the profits Is $600,000. However, if a large supermarket is built and the demand turns out to be average, the choice is to do nothing with a net present value of $100,000 or to stimulate demand through local advertising. The response to advertising can be either unfavorable with a probability of 0.2 or faverable with a probability of 0.8. If the response to advertising is unfavorable the net present value of the profit is ($20,000). However, if the response to advertising is favourable, then the net present vale of the profits in $320,000. Finally, if the large plant is built and the demand happens to be high the net present value of the profits is $650.000. Dram a decision tree and determine the most appropriate decision for this company.
Answers: 2
Advanced Placement (AP), 25.06.2019 12:30, destinybonmer
Which of these is a lower subgroup a. kingdom b. order c. genus d. species
Answers: 1
Advanced Placement (AP), 27.06.2019 01:30, iilovejohnccena1022
Astitch in time saves nine. a penny saved is a penny earned. these sentences similar in meaning opposite in meaning neither the same nor the opposite
Answers: 1
A supermarket operator must decide whether to build a medium size supermarket or a large supermarket...
Mathematics, 31.01.2021 14:30
English, 31.01.2021 14:30
Biology, 31.01.2021 14:30
English, 31.01.2021 14:30
Health, 31.01.2021 14:30
History, 31.01.2021 14:30
Social Studies, 31.01.2021 14:30
Social Studies, 31.01.2021 14:30