Precision the future of the market

Assignment Help Business Management
Reference no: EM131071541

A company has to decide whether to invest in a large and expensive new plant or in a small and cheaper new plant or in no plant at all. With the big and expensive plant and a favorable market, they estimated a $350,000 net present revenue over the next 5 years. If the market will not be favorable, they estimated a $100,000 net present total revenue. With the small plant, they estimated a $250,000 and $80,000 net present total revenue, respectively. The two plants costs $200,000 and $150,000, respectively. If the company estimates that the market will be favorable with 60% probability and unfavorable with 40% probability, (iv) advise them on which plant to invest on.

The company could also commission a $20,000 survey that can predict with more precision the future of the market. If the survey predicts a favorable market (you may still use the 60% probability for this), the market will be be favorable with a 80% probability, and if the survey predicts an unfavorable market (you may still use the 40% probability for this), the market will be be favorable with a 90% probability 1. In other words, the company would be paying a few dollars for a survey to give them more confidence before they decide whether or not to commit to a big dollar investment. Should the survey be commissioned?

Reference no: EM131071541

Questions Cloud

Explain the term business process : Explain the term Business process re-engineering and outline three features?
Represent pareto improvements over the initial allocation : Consider a small barter economy with only two individuals, John and Mark. John’s preferences for the two available goods (x and z) are given by. Draw the Edgeworth box for this economy including example indifference curves for each individual and the..
Sherman act : The growers sued for the treble damages available under the Sherman Act. CAN THEY RECOVER
Standards in the field of operations management : Question 1: Discuss the value of standardization and standards in the field of operations management.
Precision the future of the market : The company could also commission a $20,000 survey that can predict with more precision the future of the market. If the survey predicts a favorable market (you may still use the 60% probability for this), the market will be be favorable with a 80..
Analyze what changes are needed in hrd procedures : Bring in information from readings and research to help strengthen and validate your response - Discuss the process you would follow and why you selected those process steps.
Heater and oven combustion emissions : Make your Unit VII work your sixth level 1 heading titled "Heater and Oven Combustion Emissions." Describe and demonstrate (illustrate) the calculations for the following for this section of your project:
Manufacturing or a service sector company : 1. Identify either a manufacturing or a service sector company. 2. In a 2 page essay document the following items: a. Provide a background of the selected company (manufacturing pharmaceutical)
Evaluate the stakeholders involved : Propose strategies to anchor change or support continuous change.

Reviews

Write a Review

Business Management Questions & Answers

  Do you believe that legitimacy really motivates a large

do you believe that legitimacy really motivates a large powerful organization such as wal-mart? is acceptance by other

  What is the economic effect

Question 1: What is the economic effect (described in Chapter 8) that takes hold as the size of a country's population of working age individuals increases?

  Organizational behavior a manager is promoted to director

organizational behavior a manager is promoted to director above other managersa manager is promoted to a new position

  Explain and assess how a marketer would approach

Explain and Assess how a marketer would approach the Product P of the 4Ps for a service it wants to add to its existing product lineup

  Explain the implications of different types of

explain the implications of different types of organizational change such as those driven by technology product

  Customer relations - technologies

You don't need to go into great detail about any of these activities, but the more you can sketch out, the more complete your understanding of the effects of CRM on your company will be.

  About business organization

Explaning a scenario, either real or fictional, that depicts each of the following forms of business organization: Joint-stock firm, Limited Liability firm, Partnership, and Sole Proprietorship.

  Managing in today''s global environment requires

Managing in today's global environment requires organizations having managers who have been developed besides trained appropriately. Individuals, including managers, perceive people and situations in various ways

  Global capital markets

What factors are holding back the creation of a global capital market?What are the pros and cons of replacing national currencies with regional currencies?

  Determine the method that you will use for solicitation

Determine the method that you will use for solicitation of a bid. Next, explain why the Navy is likely to choose your company in the sealed-bidding process.

  Relationship between an organization ability

Explain the relationship between an organization's ability to effectively use information technology and its ability to meet its corporate strategic goals.

  Improving communication indepedent distribution channels1

improving communication indepedent distribution channels1 it is fairly obvious that the success rate of a new product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd