A software company has to decide which of two advertising strategies to adopt: TV commercials or newspaper
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A software company has to decide which of two advertising strategies to adopt: TV commercials or newspaper ads. The marketing department has estimated that sales and their probability under each alternative plan are as given in the table below:
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The firm's profit is 50 percent sales.
(a)Â Â Calculate the expected profit under each promotion strategy
(b)Â Â Calculate the standard deviation of the distribution of profits for each promotion strategy
(c)Â Â Â Which of the two promotion strategies is more risky?
(d)Â Â Which promotion strategy should the firmchoose?
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a Strategy A Expected Sales 11000 Expected Profits 5500 Stra...View the full answer
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