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please answer!!!! urgent!! A manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new
please answer!!!! urgent!!
A manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new gear for which there is increased demand. The manager has narrowed the decision to two altematives: buy one machine or buy two. If only one machine is purchased and demand is more than it ean handle, a second machine can be purchased at a later time. However, the cost per machine would be lower if the two machines were purchased at the same time. The estimated probability of low demand is 30 , and the estimated probability of high demand is. 70 . The net present value associated with the purchase of two machines intially is $76,700 if demand is low and $137,600 if demand is high. The net present value for one machine and low demand s$93,000. If demand is high, there are three options. One option is to do nothing which would have a net present value of 596,000. A second option is to subcontract that would bave a net present value of 589,000 . The third option is to purchase a second machine. This eption would have a net present value of $135,000 2. What is the EMV (expected monetary valoe) for alternative bry one machine' The EMV is SBlank 1 b. What is the EMV (expected monetary value) for altemative buy two machines? The EMV is SBlank 2 c. How many machines should the mana get purchase initially? The manager should purchase Blank 3 machine(s) initially, Blank 1 Add your answer Blank 2 Add your answer Blank 3 Add your Step by Step Solution
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