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Dianna Ivy is evaluating a plan to expand the production facilities of International Compressors Company which manufactures natural gas compressors. Dianna feels that the price
Dianna Ivy is evaluating a plan to expand the production facilities of International Compressors Company which manufactures natural gas compressors. Dianna feels that the price of coal is a significant factor in her decision. Below are her estimates of payoffs from various expansion plans under different prices of coal. If Diana knows the price of coal in the future will be higher, what expansion plan should she select? PAYOFFS ($mil) Lower Same Higher Large expansion -$500 -$100 $1,000 Medium expansion -$300 $150 $800 Small expansion -$50 $100 $400 No expansion $0 $75 $300
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