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2 Edit Question 4: (12 marks) (C2, C3) Part A: (4 marks) A company wishes to go ahead with one of three mutually exclusive projects,

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2 Edit Question 4: (12 marks) (C2, C3) Part A: (4 marks) A company wishes to go ahead with one of three mutually exclusive projects, but the profit outcome from each project will depend on the strength of sales demand, as follows. Project 1 Project 2 Project 3 Strong demand profit S 70,000 25,000 50,000 Moderate demand profit $ 10,000 12,000 20,000 Weak demand profit (loss) S (7,000) 5,000 (6,000) Probability of demand 0.1 0.4 0.5 Instructions: What is the value to the company of obtaining this perfect market research information, ignoring the cost of obtaining the information? 1

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