Cost of major expansion-cost of two minor expansions

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Reference no: EM131131644

If the cost of a major expansion is $70,000, and the total cost of two minor expansions is $90,000, what would be the EP (expected payoff or profit) for each alternative? Given this new information, which alternative would be the best?

(EP for Major Expansion= $90,000 (160,000-70,000)) (EP for Minor expansions =$55,000) (EP for Do Not Act At All remains $100,000) (EVwPI=$160,000)

Reference no: EM131131644

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