6 Suppose that the products from Exercise 5 have been rated further as shown in Table 15.

TABLE 15 Product A B C Probability of technical success 0.9 0.8 0.7 Probability of commercial success 0.6 0.8 0.9 Annual volume (units) 10,000 8,000 6,000 Profit contribution per unit $2.64 $3.91 $5.96 Lifetime of product (years) 10 6 12 Total development cost $50,000 $70,000 $100,000

a. Compute the expected return on investment over the lifetime of each product.

b. Does this computation change your ranking of the products over that obtained in Exercise 5?