Use the Information for the Question(s)below

question 57

Essay

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.

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Definitions:

Agreeableness

A personality trait characterized by warmth, kindness, and cooperation.

Conscientiousness

A personality trait characterized by organization, dependability, and a strong sense of duty.

Sense of Humor

An individual's ability to perceive, enjoy, or express what is funny, amusing, or ludicrous.

Neuroticism

A personality trait characterized by the tendency to experience negative emotions such as anxiety, anger, or depression.