Discuss what issues would be involved in a capacity expansion, in particular the timing and size of the expansion. What would be the advantages and disadvantages of an expansionist vs.wait-and-see strategy? Which one would you recommend?

For the capacity expansion decision above, describe how you would use cash flow analysis to assess the financial impact of the decision.

What are the uncertainties involved in the expansion decision? Describe how you would use decision tree analysis to assist with the decision.