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Old MathJax webview There are 3 alternatives; Option A will modernize all rooms and...

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Accounting

Old MathJax webview

There are 3 alternatives; Option A will modernize all rooms and bathrooms, Option B will modernize only the double rooms, and Option C is leaving the hotel as it is (doing nothing). The economic situation gives a 60% probability to high demand, and a 40% probability to low demand. The potential profits for different demand probabilities are given below;

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Golden Tulip of Asia Hotel is considering to renew its rooms. There are 3 alternatives; Option A will modernize all rooms and bathrooms, Option B will modernize only the double rooms, and Option Cis leaving the hotel as it is (doing nothing). The economic situation gives a 60% probability to high demand, and a 40% probability to low demand. The potential profits for different demand probabilities are given below; PROFIT PROFIT ALTERNATIVES IN HIGH DEMAND IN LOW DEMAND $ 90,000 $ 25,000 A (Modernize all) B (Modernize 2nd floor) $ 80,000 $ 70,000 $ 60,000 $ 55,00 C (Do nothing) Draw a decision tree and find the best decision for the management based on net present value calculations? til hunn hittar dosya

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