A company dedicated to the manufacture of cleaning products staff is considering the possibility of expanding the market to Germany, for which they consider these two alternatives:

1. Build a factory with sufficient production capacity that allows meeting the current demand and the expected increases in demand in the medium term.

2. Maintain capacity in the current facilities ,which they would only need some reforms that would allow a future extension of their capacity if the demand of the market increases.

A planning horizon of 12 years is considered, divided into two sections: a first tranche until the 4th year, and a second planning horizon from the 5th year. In the case of building the new factory, a cost derived from the construction and start-up of 6,000,000 has been estimated. In this case, the following forecasts have been evaluated:

- In the event of a high demand for your products during the first four years, they estimate an income of 2,000,000 / year during those first four years. Starting Hence, if in the following 8 years the demand remained high, it is estimated that the annual income would increase by 10% compared to those achieved in the four early years. If, on the contrary, the demand decreased during those last 8 years, a decrease in annual income of 20% is expected compared to the achieved in the first four years.

- In case of low demand during the first four years, the expected income would be 1,000,000 / year. In this case, the income forecasts for the 8 years

The following are the same, regardless of the evolution of demand. If the decision were to maintain the productive structure from the current factory , a facility renovation cost of 4,000,000 is estimated. In this case, forecasts are as follows:

- An income of 800,000 / year if the demand for the first four years is high, the Which are reduced to 400,000 / year if the demand in that period is classified as low.

- If after the fourth year the option is to expand capacity, a cost should be assumed of 4,000,000. With this extension, the income forecasts for the 8 years following are:

Triple the annual income of the first period if demand is high in that period.

Double the annual income if the demand is low in those 8 following years.

- Finally, if it is decided not to extend, the forecasts for the last tranche of planning are:

An increase of 25% in annual income, compared to those obtained in the first four years, if the demand in that period is high.

A decrease in income of 100,000 / year, compared to those obtained in the first four years, if demand had been low.

Before making a decision, the commercial department of the company has made a market study with experts in the detergency sector in Germany, obtaining the following conclusions:

- Two out of three experts agree that the demand for these products in Germany will be high in the short term (the first four years).

- Also two out of three experts affirm that, in that case, if the demand is high in the first four years, it will also be so in the next 8 years.

- All the experts agree that, if demand is low in the four first years, it will also continue to be low in the following 8.

With this information, show decision tree, calculate and determine the best option.