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( i ) Questions C , D , and E are independent from each other. A . Use the decision tree approach to determine the

(i) Questions C, D, and E are independent from each other.
A. Use the decision tree approach to determine the expected net value from the current
capacity portfolio (i.e., expected total profit from sales minus the total capital expense for
the capacities). Please (i) draw the decision tree, (ii) specify the sales numbers under each
of the demand scenarios, (iii) calculate the expected total profit from sales and the the
total capital expense for the capacities, (iv) and finally derive your answer about the
expected net value. Make sure to include explanations and formulas to show how you
derive the numbers.
B. Calculate the return of investment (ROI) under the current capacity portfolio. Show your
formula.
C. Holding all else as is, determine the marginal value for FlexMan if their assembly capacity
for routers was to increase by one unit. Is it profitable to do so? Show the calculations and
explain your answer.
D. Holding all else as is, determine the marginal value for FlexMan if their assembly capacity
for switches was to increase by one unit. Is it profitable to do so? Show the calculations
and explain your answer.
E. Holding all else as is, determine the marginal value for FlexMan if their testing capacity
was to increase by one unit. Is it profitable to do so? Show the calculations and explain
your answer.
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