A company is considering a lunch of a new product. There ar…
A company is considering a lunch of a new product. There are three potential designs at different price points. The company only wants to produce one. Sales of each design are thought to be linked to the broader performance of the economy in the next two years. Their staff economist believes the probabilities of a good, fair, and poor market in that time span are .35, .40, and .25. Good Market Fair Market Poor Market Low Cost Design $55,000 $51,500 $14,500 Mid Cost Design $59,000 $42,000 $20,000 High Cost Design $72,000 $34,000 -$10,000 A consulting team that studies the market in great detail has offered to tell them the market condition for the next two years ahead of time, thus providing them with perfect information. What is the Expected Value of this Perfect Information? (Answer to the nearest whole number)
Read Details