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A firm is in the process of deciding to launch a new product. If the company does not release the product to the market, it

A firm is in the process of deciding to launch a new product. If the company does not release the product to the market, it does not have any revenue for this product. On the other hand, if the product is released, the firm's income situation will be uncertain and three different cases will be considered with related probabilities: with probability 0.55, sales will be very high (blockbuster), with probability 0.45 an ordinary sales level will be achieved, or with 0.05, loss will be observed. Profit and losses for these three different situations are $7, $3 and -$4 million, respectively.

I. What would be the decision for the product?

ii. The company will work with a research company to get rid of this uncertainty and will make the production decision as a result of the consulting given by this company. The payment to the consultant will be made when the sales figures come, and this will be at the end of a period of approximately six months. Find the minimum payment to be made for the consultant at the end of this six-month period where the annual nominal interest is 10%

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