l. (2 point) A European apparel manufacturer has production facilities in Italy and lChina to serve its European market, where annual demand is for 1.9 million units. Demand is expected to say at the same level over the foreseeable future. Each facility has a capacity of 1 million units per year. With the current exchange rates, the production and distribution cost from Italy is ID euros per unit, whereas the unit production and distribution cost from China is ? euro. Over each of the next three years, the Chinese currency could rise relative to the euro by 15 percent 1with a probability of [Hi or drop by 5 percent with a probability of [1.5. An option being considered by the company is to shut down [1.5 million units of capacity in Italy and move it to China at a onetime cost of 2 million euros. Assume a discount factor of ID percent over the three years. Do you recommend this option? [Please use a decision tree to reach your conclusion)