A company has decide which of three new mutually exclusive products to launch. The directors believe that demand for the products will vary depending on competitor reaction. There is a 30% chance that competitor reaction will be strong, a 20% chance that competitor reaction will be normal and a 50% chance that competitor reaction will be weak. The company uses expected value to make this type of decision.

The net present value for each of the possible outcomes is as follows:

A market research company believes it can provide perfect information on potential competitor reaction in this market.
Required:
Calculate the maximum amount that should be paid for the information from the market research company.

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Product A Product B Product C Competitor reaction $000s $000s $000s Strong 200 400 600 Normal 300 600 400 Weak 500 800 500