ABC company sells product X to the local market. As a result of decline in demand for product X, ABC is planning to launch a new product, product Y. Each unit of product Y will sell for N$10. The company is not sure of the unit cost to produce one unit of product Y. The production manager has estimated that one unit of product Y might cost either N$6 per unit or N$8 per unit. There is a 70% chance that it will cost N$6 per unit. Due to the uncertainty of the demand of product Y during, the sales department has estimated that they can either sell 10 000 units or 15 000 units. There is a 20% chance that 15 000 units will be sold.

REQUIRED:		MARKS
1.1	With the aid of a decision tree, advise ABC whether to launch or not launch ptoduct Y. Show all the relevant working to support your answer. Please note there is negative marking for not following the rules of decision trees.	20
Total		20