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Hanson’s first task at Horizon involves determining if the existing information system should be upgraded or remain. Two upgrade options, whether to build the new infrastructure or buy new infrastructure are shown in the decision tree created below by Hanson, with the associated costs and impacts. The cost and impact of staying with the existing infrastructure are also shown below.  What is the EMV for Build the New Infrastructure?

Hanson’s first task at Horizon involves determining if the existing information system should be upgraded or remain. Two upgrade options, whether to build the new infrastructure or buy new infrastructure are shown in the decision tree created below by Hanson, with the associated costs and impacts. The cost and impact of staying with the existing infrastructure are also shown below.  What is the EMV for Build the New Infrastructure?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Hanson’s first task at Horizon involves determining if the existing information system should be upgraded or remain. Two upgrade options, whether to build the new infrastructure or buy new infrastructure are shown in the decision tree created below by Hanson, with the associated costs and impacts. The cost and impact of staying with the existing infrastructure are also shown below. 

What is the EMV for Build the New Infrastructure?   

 

 

Successful Build the new Deployment infrastructure Impact: $2M Cost: $0.5M Unsuccessful 40% Deployment Buy new Impact: $4M infrastructure Stay, Buy. Build Cost: $0.75M 50% Successful Deployment Decision Impact: $2M Stay with existing infrastructure Unsuccessful Cost: $OM Deployment 100% Impact: $4.2M Decline in Business Impact: 2M
Transcribed Image Text:Successful Build the new Deployment infrastructure Impact: $2M Cost: $0.5M Unsuccessful 40% Deployment Buy new Impact: $4M infrastructure Stay, Buy. Build Cost: $0.75M 50% Successful Deployment Decision Impact: $2M Stay with existing infrastructure Unsuccessful Cost: $OM Deployment 100% Impact: $4.2M Decline in Business Impact: 2M
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