A company wants to produce a souvenir with a marketing life of six months. Uncertainty surrounds the likely sales volume as well as the fixed costs of the venture as shown below:

Sales units Probability Contrn. /unit Probability Fixed cost Probability

100 000 0.3 K 7 0.5 K400 000 0.2

80 000 0.6 K 5 0.5 K450 000 0.5

60 000 0.1 K500 000 0.3

1.0 1.0 1.0

Determine the expected value of the contribution