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High Tech Inc. is pondering the idea of building an additional manufacturing facility to produce...

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Finance

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High Tech Inc. is pondering the idea of building an additional manufacturing facility to produce the Enhanced Turboencabulator presently in the New Product Design phase of development. The options being considered: a. Build a small factory at a cost of $7.3 million. i. If demand for the ET (Enhanced Turboencabulator) is LOW, they anticipate receiving about $9.3 million in revenue. ii. If demand for the ET is HIGH, they anticipate receiving about $13.4 million in revenue. b. Build a large factory at a cost of $10 million. i. If demand for the ET is LOW, they anticipate receiving about $11 million in revenue. ii. If demand for the ET is HIGH, they anticipate receiving about $15.4 million in revenue. Overall, the probability of demand being HIGH is . 38 , while the probability of demand being LOW is .62 . If High Tech decides not to build (do nothing), that would result in NO additional revenue, as the present facility cannot build the ET. Your job is to construct a Decision Tree that will assist High Tech with driving the best decision. ( 30 pts)

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