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ABC Company is investigating the possibility of producing and marketing backyard storage sheds. Undertaking this project would require the construction of either a large or

ABC Company is investigating the possibility of producing and marketing backyard storage sheds. Undertaking this project would require the construction of either a large or a small manufacturing plant (60K and 50K of investment respectively). The market for the product produced-storage sheds - could be either favorable or unfavorable. ABC, of course, has the option of not developing the new product line at all.
With a favorable market, a large facility will bring ABC a net profit of $200,000. If the market is unfavorable, a $180,000 net loss will occur. A small plant will result in a net profit of $100,000 in a favorable market, but a net loss of $20,000 will be encountered if the market is unfavorable.
The probabilities of the market being favorable or unfavorable are estimated to be equal.
Should ABC build small or large manufacturing facility, or not build any plant at all?
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