4. Determine the probability that the following tree reflecting demand for a product, given an expense of acquiring the necessary equipment of $100k, has a rate of return higher than 30% per year. $100k acquisition cost Low demand p=0.35 High demand p=0.65 Decide 4 yrs gycs 10 yrs Sales: $27k/yr Sales: $26k per year with a $35k overhaul in yr 4 Sales $45k/yr
4. Determine the probability that the following tree reflecting demand for a product, given an expense of acquiring the necessary equipment of $100k, has a rate of return higher than 30% per year. $100k acquisition cost Low demand p=0.35 High demand p=0.65 Decide 4 yrs gycs 10 yrs Sales: $27k/yr Sales: $26k per year with a $35k overhaul in yr 4 Sales $45k/yr
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Determine the probability that the following tree reflecting demand for a product, given an expense of
acquiring the necessary equipment of $100k, has a rate of return higher than 30% per year.
4.
Sales: $27k/yr
4 ycs
Decide
Sales: $26k per year with a $35k overhaul in yr 4
Low demapd p=0.35
$100k acquisition cost
High demand p=0,65
Sales $45k/yr
10 yS
Decide
12 ycs
Sales $35k per year with a $35k overhaul in yr 6](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F509a1b31-0807-435b-88e2-c7cde69126a6%2F9db97992-56c0-405f-8b71-487b19cc24d1%2F47qdw9f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Determine the probability that the following tree reflecting demand for a product, given an expense of
acquiring the necessary equipment of $100k, has a rate of return higher than 30% per year.
4.
Sales: $27k/yr
4 ycs
Decide
Sales: $26k per year with a $35k overhaul in yr 4
Low demapd p=0.35
$100k acquisition cost
High demand p=0,65
Sales $45k/yr
10 yS
Decide
12 ycs
Sales $35k per year with a $35k overhaul in yr 6
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