subject
Physics, 11.04.2021 20:20 boogydavis219

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.

ansver
Answers: 3

Another question on Physics

question
Physics, 22.06.2019 04:00
Simple machines can a. increase force only b. decrease force only c. increase or decrease force
Answers: 3
question
Physics, 22.06.2019 05:00
Unpolarized light falls on two polarizer sheets whose transmission axes are at right angles. a third polarizer is placed between the first two so that its axis makes a 52-degree angle with the axis of the first polarizer. a) what fraction of the incident light intensity is transmitted through the first polaroid? b) what fraction of the incident light intensity is transmitted through the second polaroid? c) what is the angle of polarization of the light that enters the third polaroid? d) what fraction of the incident light intensity is transmitted through the third polaroid. e) what happens if the middle polaroid is removed?
Answers: 3
question
Physics, 22.06.2019 08:50
You are a sales representative for a company that makes a new alternate fuel for vehicles. you have prepared a presentation for the environmental engineers to sell your new product. what question do you expect the audience to ask regarding whether the new fuel will cause less damage to the environment? a. do we have to change any parts of the vehicle to use this alternate fuel? b. will the vehicles get better fuel mileage with the alternate fuel? c. how much greenhouse gas does your fuel produce compared with current fuel sources? d. is the alternate fuel more expensive than fossil fuel?
Answers: 2
question
Physics, 22.06.2019 09:00
For which pair of objects would adding the same a
Answers: 1
You know the right answer?
A supermarket operator must decide whether to build a medium size supermarket or a large supermarket...
Questions
Questions on the website: 13722359