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Use the information for the question(s)below.
You own a small manufacturing plant that currently generates revenues of $2 million per year.Next year,based upon a decision on a long-term government contract,your revenues will either increase by 20% or decrease by 25%,with equal probability,and stay at that level as long as you operate the plant.Other costs run $1.6 million per year.You can sell the plant at any time to a large conglomerate for $5 million and your cost of capital is 10%.
-Assuming you are able to sell the plant,draw a decision tree detailing this problem.
Irritability
A heightened sensitivity to stimulation or an exaggerated response to environmental stimuli, often resulting in emotional or behavioral outbursts.
Depression
A common and serious mood disorder that affects how one feels, thinks, and handles daily activities, characterized by persistent sadness.
Local Anesthetic
A medication used to temporarily block sensation in a particular area of the body without affecting consciousness.
Cocaine
A powerful and illegal stimulant drug derived from the leaves of the coca plant, known for its ability to produce intense short-term euphoria and increased energy.
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