Decision Tree Assignment

Decision Tree Assignment

Mondi Plastics Company is one of the small companies that have got into a contract agreement with Ford Motor Co. to produce spoilers for their new 2013 Ford Fusion. They have an option of using their current plant which is almost at peak capacity. This option will require an initial cost $400,000 for the mold and will generate annual cash flows of $300,000. If they exercise this option, they cannot take additional work from Ford or any other company.
They also have the alternative of opening a new plant which will cost them $800,000. With the new plant there is a 25% chance that they will generate cash flow of $300,000/yr. If this happens, they will sell the plant at $600,000 after year 1.
With the new plant, there is also a 75% chance of increased production with a cash flow of $450,000 in that first year. If this is the case, they will either:
• Expand New Plant which will require $250,000 investment. This is projected to generate annual cash flows with respective probabilities as follows: $750,000 (0.2), $450,000 (0.5), and $550,000 (0.3). OR
• No expansion: in which case the current production and CF of $450,000/yr will be maintained for the remaining years. Given a MARR of 12% and a 3 year study period, use excel and:
a) Construct a decision tree and include all the values and probabilities.
b) Determine the expected PW values for the “Expand New Plant/No Expansion” decision node which occurs after year 1.
c) Determine the expected PW values for the “Current Plant/New Plant” decision node and give your recommendation on what option the management of Moindi should take. Get Finance homework help today with Homework Market

Homework Market
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Homework Market

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Homework Market

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Homework Market

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Homework Market

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Homework Market

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

Homework Market

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Homework Market

Place your order

Fill in the order form and provide all details of your assignment.

Homework Market

Proceed with the payment

Choose the payment system that suits you most.

Homework Market

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Homework Market Homework Market

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Homework Market Homework Market

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Homework Market Homework Market

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Homework Market Homework Market

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.