A company uses decision tree analysis to evaluate potential options. The management accountant for the company has

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A company uses decision tree analysis to evaluate potential options. The management accountant for the company has established the following:

What would be the cost of the upgrade that would make the company financially indifferent between building new premises and upgrading the old one?(a) ?100 000(b) ?900 000(c) ?1 000 000(d) ?1 700 000

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Management and Cost Accounting

ISBN: 978-1473748873

10th edition

Authors: Colin Drury

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Question Posted: Feb 10, 2020 05:43 AM

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A company uses decision tree analysis to evaluate potential options. The management accountant for the company has

Question:

Cash flows from sales revenue 0.8 High sales = £2 000 000 Build new premises Cost £1 000 o00 Low sales = £1 000 000 0.2 0.7 High sales = £2 000 000 Upgrade old premises Cost = ? Low sales = £1 000 000 0.3

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Decision Tree is basically a graphical presentation of a probable probl...View the full answer

Management and Cost Accounting

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