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2. Carrefour is currently considering expanding its capacity to accommodate the growing demand. One of these options is to build a nearby store, expand
2. Carrefour is currently considering expanding its capacity to accommodate the growing demand. One of these options is to build a nearby store, expand the existing store, or do nothing. The probability that the economy will stabilize is 40%. And 30% for the economic situation to be poor or for 30% to be excellent. The current value has been estimated based on the different expected economic conditions. Expand old storage Build new Do nothing High demand 1,900,000 1,500,000 500,000 Moderate demand 300,000 500,000 0 Low demand 500,000 300,000 100,000 A. Draw a decision tree for this problem. What is the expected net present value for the project? B. Should you invest, and why?
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