{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

MG375 Week 2 Homework

MG375 Week 2 Homework - Example 4.2 Decision trees Value...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Example 4.2 - Decision trees Value Revenue Build Cost Strong Growth $765,000 $975,000 $210,000 0.55 Move $585,000 Weak Growth $365,000 $575,000 $210,000 0.45 Strong Growth $863,000 $950,000 $87,000 0.55 $703,750 Expand $660,500 Weak Growth $413,000 $500,000 $87,000 0.45 Expand $843,000 $930,000 $87,000 Strong Growth $850,000 0.55 Do Nothing $703,750 Do Nothing $850,000 $850,000 $0 Weak Growth $525,000 $525,000 $0 0.45 Chapter 4, Problem 5 Value Revenue Building Cost High demand $4,800,000 $12,000,000 $6,000,000 0.4 Small Facility $4,800,000 Low demand $6,000,000 $10,000,000 $6,000,000 0.6 High demand $5,600,000 $14,000,000 $9,000,000 0.4 $4,800,000 Large Facility $2,600,000 Low demand $6,000,000 $10,000,000 $9,000,000 0.6 High demand $0 $0 $0 0 Do Nothing $0 Low demand $0 $0 $0 0 Hacker's Computer Store Expando Additional Factory
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Exhibit 4.4 - Decision Tree Analysis EV= $585,000.00 $765,000.00 Strong Growth 0.55 $365,000.00 Weak Growth Move 0.45 EV= $660,500.00 $863,000.00 Strong Growth Expand 0.55 $413,000.00 Weak Growth Expand 0.45 $843,000.00 EV= $850,000.00 Do Nothing Strong Growth 0.55 Do Nothing $850,000.00 EV= $703,750.00 Weak Growth $525,000.00 0.45 Alternative Revenue Cost Value Move to new location, strong growth $975,000.00 $210,000.00 $765,000.00 Move to new location, weak growth $575,000.00 $210,000.00 $365,000.00 Expand Store, strong growth $950,000.00 $87,000.00 $863,000.00
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern