Champion Electronics (CE) is the producer of BitFit fitness watches in Australia. They currently produce a single model, the BitFit-1, which is sold at various outlets around the country. CE is considering investing $12 Million in research and development (R&D) to upgrade the watch and improve its functionality and design. Investing in RAD does not guarantee success; if successful, the upgraded watch (branded BitFit-2) will be sold and the existing watch (BitFit-1) will be phased out. If R.&D is unsuccessful, then CE will continue selling the BitFit-1. After a careful evaluation of the proposed R.&D process, the company estimates the probability of its success at 0.6. Champion Electronics will also need to decide on the recommended retail price (RR.P) for their watches. After undertaking extensive market research, the company has estimated the following demand distributions for BitFit-1 and BitFit-2 as a function of the RR.P: Demand (units) RRP (S/unit) 320K 480K 80OK $180 0.10 0.20 0.70 BitFit-1 $215 0.20 0.40 0.40 $300 0.60 0.30 0.10 $180 0.05 0.10 0.85 BitFit-1 $125 0.10 0.20 0.70 $300 0.20 0.50 0.30 Assume that the profit margin of the company is 50% of sales revenue