Steve Gentry,the Operations Manager of Baja Fabricators,wants to Purchase a New

question 25

Essay

Steve Gentry,the operations manager of Baja Fabricators,wants to purchase a new profiling machine (it cuts compound angles on the ends of large structural pipes used in the fabrication yard).However,because the price of crude oil is depressed,the market for such equipment is down.Steve believes that the market will improve in the near future and that the company should expand its capacity.The table below displays the three equipment options he is currently considering,and the profit he expects each one to yield over a two-year period.The consensus forecast at Baja is that there is about a 30% probability that the market will pick up "soon" (within 3 to 6 months)and a 70% probability that the improvement will come "later" (in 9 to 12 months,perhaps longer).
a.Calculate the expected monetary value of each decision alternative.
b.Which equipment option should Steve take?

Understand the role of leadership in fostering a diverse and inclusive workplace environment.

Understand the different levels of strategy within an organization.

Recognize the role of nonprofit organizations and how they differ from for-profit businesses.

Identify the components of an industry and how organizations are grouped.

---

Definitions:

Stocks And Bonds

Stocks and bonds are financial instruments; stocks represent ownership shares in a company, while bonds are debt securities issued by entities like governments or corporations to raise capital.

Gross Domestic Product

The total market value of all final goods and services produced within a country in a given period, used as a broad measure of economic activity.

Exports

Goods or services produced in one country and sold to buyers in another country, contributing to the exporting country's gross domestic product.

Imports

Goods and services brought into a country from abroad for sale.