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Sunshine Manufacturing Company has developed a unique new product and must now decide between two facility plans. The first alternative is to build a large

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Sunshine Manufacturing Company has developed a unique new product and must now decide between two facility plans. The first alternative is to build a large new facility immediately. The second alternative is to build a small plant initially and to consider expanding it to a larger facility three years later if the market has proven favorable. Marketing has provided the following probability estimates for a 10-year plan: Next 7-Year Demand Probability 0.2 First 3-Year Demand Unfavorable Unfavorable Favorable Favorable 0.0 Unfavorable Favorable Favorable Unfavorable 0.7 0.1 If the small plant is expanded, the probability of demands over the remaining seven years is 7/8 for favorable Favoidule Undvuldule 0.1 If the small plant is expanded, the probability of demands over the remaining seven years is 7/8 for favorable and 1/8 for unfavorable. The accounting department has provided the payoff for each outcome. Facility Plan Payoff Demand Favorable, favorable Favorable, unfavorable Unfavorable, unfavorable Favorable, favorable Favorable, unfavorable Favorable, favorable Favorable, unfavorable Unfavorable, unfavorable 2-expanded 2expanded 2not expanded 2not expanded 2not expanded $5,000,000 2,500,000 1,000,000 4,000,000 100,000 1,500,000 500,000 300,000 Use these estimates to analyze Sunshine's facility decision. Use these estimates to analyze Sunshine's facility decision. a. Perform a complete decision tree analysis. Upload a your decision tree via the next question. b. Recommend a strategy to Sunshine. c. Determine what payoffs will result from your recommendation. What is the likelihood of each possible outcome/payoft

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