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.

1.3 JMT Limited's finance director has to choose between two mutually exclusive options of producing Toy Y and Toy Z. The probable costs of each option are provided below. (13) Toy Y Toy Z Probability 0.25 0.55 0.20 Cost (R000) 18,000 21,000 30,000 Probability 0.30 0.30 0.60 Cost (R'000) 15,000 19.000 30,000 Additional information: Both options generate revenue amounting to R32,000,000 Probabilities apply to costs and revenue Required: Determine which option JMT Limited's finance director should choose given the information provided. Explain the basis of your determination