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A Northwest party products manufacturer has production facilities in Spokane, WA and Bangladesh. Both facilities have capacities of 1 million units each per year. The
A Northwest party products manufacturer has production facilities in Spokane, WA and Bangladesh. Both facilities have capacities of million units each per year. The cost of production and distribution of party supplies from Spokane is $unit The cost of production and distribution from Bangladesh is TakaunitCurrent exchange rate is $ Taka Over the next two years the exchange rate is expected to strengthen by with a probability and weaken by with a probability of
The expected demand this year is about million units. Over the next two years the demand is expected to increase by with a probability of and decrease by with a probability of If demand is more than the capacity of the two plants then the remaining supplies are acquired from a competitor for $unit
The company is considering increasing the capacity of the Bangladesh plant by units at a fixed cost of $ million. The fixed cost will be incurred this year. What is the NPV of the revised setup?
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