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General Lighting currently supplies headlamps to a large segment of the automobile industry. Managers are contempkating a facility upgrade. This requires an upfront investment of

General Lighting currently supplies headlamps to a large segment of the automobile industry. Managers are contempkating a facility upgrade. This requires an upfront investment of $600 million. The projects opportunity cost of capital is 18% and the yield on US Treasury securities is 5%. Managements estimates of the cash flows and probabilities for different decisions at different pointsin time is summarized by a tree diagram

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