A hardware company sells a lot of low-cost, high- volume products. For one such product, it is equally likely that annual unit sales will be low or high. If sales are low (60,000), the company can sell the product for $10 per unit. If sales are high (100,000), a competitor will enter and the company will be able to sell the product for only $8 per unit. The variable cost per unit has a 25% chance of being $6, a 50% chance of being $7.50, and a 25% chance of being $9. Annual fixed costs are $30,000. a. Use simulation to estimate the companys expected annual profit SPECIFICALLY HOW TO SET UP AND RUN SIMULATION ON @RISK USING SET UP IN IMAGE

Price $10 Low High Mean Value 60000 100000 60000 Prob 0.5 0.5 $10 Distribution of variable cost per unit Value $6.00 $7.50 $9.00 $7.50 Prob 0.25 0.50 0.25 Mean Annual fixed cost $30,000 Simulation for part a Units sold "ixed cost Unit Variable cost Total Variable Cost Unit Price ital Revenue Profit