Use the Information for the Question(s)below

question 25

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%.
-Assume that you are not able to sell the plant,but you are able to shut down the plant,at no cost,at any time.Draw a decision tree detailing this problem.

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Definitions:

Lazy

A reluctance to work or make an effort, often characterized by a lack of motivation or interest in being productive.

Prevalent Stereotypes

Commonly held oversimplified images or ideas of particular types of people or things.

Religious Affiliation

The formal association or identification of an individual with a particular religious group or tradition.

Intelligence

The ability to learn from experience, adapt to new situations, understand and handle abstract concepts, and use knowledge to manipulate one's environment.