Question 5: A company uses decision tree analysis to evaluate potential options. The management accountant for the company has established that the company has a choice of either building new premises at a cost of $ 1,000,000 or upgrading the existing premises. If the company decides to build the new premises, it will be able to generate additional cash flows from revenues. These depend on whether the sales are at a high level (probability of 0.8 and cash revenue $2,000,000) or the sales are at a low level (probability of 0.2 and cash revenue $1,000,000). Similarly, if the company decides to upgrade the existing premises, it will also be able to generate cash flows from revenues. These will depend on whether the sales are at a high level (probability of 0.7 and cash revenue $2,000,000) or the sales are at a low level (probability of 0.3 and cash revenue $1,000,000). What would be the cost of the upgrade that would make the company financially indifferent between building new premises and upgrading the existing one? (LO2) (BT Level: Apply) (8 Marks)