Decide between two options for your project

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Reference no: EM132195955

You are trying to decide between two options for your project. In one option, the work would be performed in Indonesia, and in the other, the work would be performed in Texas. Your company will decide in the next three months whether it will begin a special program that will increase the demand for its American-made products. You are told that this new program has an 80% likelihood of happening. If it does happen, you are told to expect that work completed in Texas would have a value of $20M. If it doesn't happen, the value of work completed in Texas would be $10M. If the work were performed in Indonesia, you would expect a value of $19M if the program is approved (80% chance) and $25M if the program is not approved (20% chance). If the work were performed in Indonesia, your organization would have to invest $5M in new equipment. No investment is needed if the work is to be performed in Texas. Using expected monetary value analysis and considering the investments necessary in Indonesia, should the project work be performed in Indonesia or Texas? What are the EMVs for each possibility?

Reference no: EM132195955

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