Reference no: EM131419983
(DECISION TREE). You have located a piece of property that you would like to buy to build a factory on. It is currently zoned for multi-family housing but you are planning to request new zoning.
You are given the following information: Cost of land, $2 Million, Probability of rezoning = 0.60, and if land is rezoned there will be an additional cost of $1 million for new roads, lighting, and so on. If the land is rezoned, you must decide whether to: 1) build a large factory at a construction cost of $10M that can produce 150,000 units/year and, depending on the market, has a 70% chance of making $4M/year profit, and a 30% chance of making $5M/year profit; or 2) a smaller factory at a construction cost of $9M that can produce 100,000 units/year and, depending on the market, has a 60% chance of making $4.5M/year profit, and a 40% chance of making $3M/year profit. However, if the land is not rezoned, you must comply with the existing zoning. You do not need to spend $1M on site prep but now you will build 600 apartments at a construction cost of $5M and rent each one at a $3,000 profit/year.
Part A) Draw the decision tree with the probabilities on each branch: THIS SHOULD BE A DRAWING OR DIAGRAM! PLEASE ANSWER THIS PART...
Part B) If the land is rezoned, what is the expected 1-year return on investment (ROI) for each of the two factory options? Would you build the large or small factory?
Part C) If the land is not rezoned, what is the expected 1-year return on investment (ROI) for building the apartments?
Part D) Since you don't know the zoning outcome at the time of purchase, what is the overall expected 1-year ROI for this project? Do you think it's a good investment?
|
Difficult to imitate and opens up potential markets
: This is the thing an organization does best—something that draws customers to the company, is difficult to imitate, and opens up potential markets? This strategy is used by organizations that target a very specific market or clientele. An organizatio..
|
|
Summary of the issue of cost and value in healthcare
: Write a minimum 2 paragraph summary of the issue of cost and value (quality) in healthcare. In a second or third paragraph cite an example of a healthcare provider's efforts to align cost and value. Include results and specifics along with citations ..
|
|
Nondirectional hypothesis and null hypothesis
: Match the terms in Set A with each of the statements in Set B. Set A Directional hypothesis, Nondirectional hypothesis, Null hypothesis, Not a hypothesis as stated.
|
|
Summary of the issue of cost and value in healthcare
: Write a minimum 2 paragraph summary of the issue of cost and value (quality) in healthcare. In a second or third paragraph cite an example of a healthcare provider's efforts to align cost and value. Include results and specifics along with citations ..
|
|
What is the expected one-year return on investment
: You have located a piece of property that you would like to buy to build a factory on. It is currently zoned for multi-family housing but you are planning to request new zoning. If the land is rezoned, what is the expected 1-year return on investment..
|
|
Analyze a strategy for integration of prudent databases
: Describe and analyze the core business processes in a manufacturing setting in the context of Master Data Management (MDM). Apply and analyze a strategy for integration of prudent databases.
|
|
Briefly explain the benefits of customer data integration
: Briefly explain the benefits of Customer Data Integration (CDI). Among MDM systems in the market, which best supports a CDI architecture?
|
|
Strategy and productivity
: An electronic company makes communications devices for military contracts. The company just completed two contracts. The navy contract was for 2,300 devices and took 25 workers two weeks (40 hours per week) to complete. The army contract was for 5,50..
|
|
Tableau at showing the different dimensions of big data
: How flexible do you consider Tableau at showing the different dimensions of Big Data? The “5V’s of Big Data are: Variety of data types, Volume of the Data, Velocity of changes in the Data, Veracity of the Data, and Value of the Data. Does this Exerci..
|