Your are the CFO of the Maxim Group Inc. You have created the following scenario analysis for next year's production: (explain why with detailed steps, please do not use excel)

Question 5: You are the CFO of The Maxim Group Inc. As part of your planning process, you are considering outsourcing production of a small component (the widget) of the company's main product. You have created the following scenario analysis for next year's production: Widget Units Probability 35% 50% 15% Outcome Exceptional Average Poor IF the company continues to manufacture this product "in-house", the variable cost Needed 1,000,000 800,000 700,000 per unit is $15.33. The fixed costs are $10M in total. ALTERNATIVELY, the company could outsource production of the widget, and the new supplier has quoted a price of $27 per widget. Based on the above facts, and ignoring other more esoteric concepts as supply chain security, should the company outsource production of the widget? Why