The Quick-Start Company has the following pattern of potential cash flows for a new machine....
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The Quick-Start Company has the following pattern of potential cash flows for a new machine. The company would only invest, which costs $100 million, after they have verified that the machine can run properly. The probability of the machine running properly is 60%. The testing cost is $20 million. If the company has a discount rate of 17 percent, please use the decision tree analysis to help Quick-Start determine whether this new machine should be tested or not. Please explain your reasons
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The Quick-Start Company has the following pattern of potential cash flows for a new machine. The company would only invest, which costs $100 million, after they have verified that the machine can run properly. The probability of the machine running properly is 60%. The testing cost is $20 million. If the company has a discount rate of 17 percent, please use the decision tree analysis to help Quick-Start determine whether this new machine should be tested or not. Please explain your reasons 