1.3 JMT Limiteds finance director has to choose between two mutually exclusive options (13) of producing Toy Y and Toy Z. The probable costs of each option are provided below.

Probability 0.25 0.55 0.20

Cost (R000) 18,000 21,000 30,000

Toy Y

Toy Z

Probability Cost (R000) 0.30 15,000 0.30 19,000 0.60 30,000

Additional information:

Both options generate revenue amounting to R32,000,000.

Probabilities apply to costs and revenue. Required:

Determine which option JMT Limiteds finance director should choose given the information provided. Explain the basis of your determination