A start$-$up company is looking to determine the best strategy for distributing its

new product for the next ten years. Since the

demand for its new product is uncertain, the operations and logistics department has

prepared a decision tree $($in the appendix$).$ The tree shows the annual operating costs,

linked to transport, the probabilities of each possible scenario and has two decision

points A and $B.$

Decision $A,$ to be made now

Buy now a small truck $($cube type$)$ at a cost of $$80,000$ and whose disposal

value will be $$20,000$ in ten years; Or

Rent a larger truck $(18-$foot type$)$ for a period of $10$ years. Decision B$,$

to be taken in three years, only if we choose in A to purchase a small truck $($cube type$)$

NOW.

Buy another small truck at a cost of $$60,000$ and whose disposal value will be $

$15,000$ in $10$ years.

Do not buy trucks, in which case you could rent a truck on an ad hoc basis depending on the

needs.

The company's TRAM is $10\%$ and all amounts take taxes into account. Complete the decision

tree at point A and show your calculations in the space provided.