Drive-With-Us (Pty) Ltd (DWU) is a rental company that has three mutually exclusive rental projects to...

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Drive-With-Us (Pty) Ltd ("DWU") is a rental company that has three mutually exclusive rental projects to undertake. Management believes that the success of the projects will depend on consumers reaction. There is a 20% chance that consumer reaction will be strong, 45% chance that consumer reaction will be good and 35% chance that consumer reaction will be weak. DWU uses expected values to make this type of decision. The estimated net present value for each possible outcome is as follows: Consumer demand Strong Good Weak Projects Class A Rands 2 000 000 450 000 Class B Rands 2 600 000 Class C Rands 2 200 000 500 000 575 000 400 000 340 000 300.000 A market research company called Solutions (Pty) Ltd believes that it can provide perfect information on whether the consumer reaction will be strong, good or weak. REQUIRED: Calculate the maximum amount that Drive-With-Us (Pty) Ltd should be willing to pay to Solutions (Pty) Ltd for the market research information. Drive-With-Us (Pty) Ltd ("DWU") is a rental company that has three mutually exclusive rental projects to undertake. Management believes that the success of the projects will depend on consumers reaction. There is a 20% chance that consumer reaction will be strong, 45% chance that consumer reaction will be good and 35% chance that consumer reaction will be weak. DWU uses expected values to make this type of decision. The estimated net present value for each possible outcome is as follows: Consumer demand Strong Good Weak Projects Class A Rands 2 000 000 450 000 Class B Rands 2 600 000 Class C Rands 2 200 000 500 000 575 000 400 000 340 000 300.000 A market research company called Solutions (Pty) Ltd believes that it can provide perfect information on whether the consumer reaction will be strong, good or weak. REQUIRED: Calculate the maximum amount that Drive-With-Us (Pty) Ltd should be willing to pay to Solutions (Pty) Ltd for the market research information.

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