During 3 years ahead, CEO of Alfa tires co predicted that the probability of economic conditions next year is either 40% growing, 27% normal and the rest is contracted. If the economic condition next year is growing, he expect the probability of 10M tires to be sold would be 25%, 9M tires 45% and 8M tires 30%. If it is normal conditions then the probability of 6M tires to be sold would be 40%, 5M tires sold equal to 30% and the rest would be 4M. During the contracted period, the company could sell 2M with probability 50% and 50% probability of 1M tires sold. Selling price per tire is $60 per tire and the cost making tire is $40 per tire. To achieve sales target, the company need marketing support. In the growing period, the company probably enlist the help of TV, Radio and Billboard advertising. However, in the contracted period you only list TV and billboard advertisement. The composition of budget would be 50% TV, 20% radio and the rest is Billboard during the growing and normal period. If next year condition is contraction, then the marketing budget allocation would be 30% TV and the rest would be Billboard. The total Marketing budget usually 15% of revenue. The probability of success TV advertisement is 65%, Billboard 25% the rest for radio during the normal and growing period. However, if is its contraction period then Billboard probability of success is 75%. The setup cost for Growing, Normal and Contracted condition is $250M, $200M and 150M respectively. Cost of Capita currently at 3%. How much is the expected profit of the 3 yrs period (in Million)? 19.31M

a.

$ 19.31M

b.

$ 17.65M

c.

$ 17.85M

d.

$ 19.36M

e.

$ 17.60M

f.

$ 17.85M

g.

$ 19.85M

h.

$ 17.31M

i.

$ 19.61M

j.

$ 17.06M

k.

$ 17.80M

l.

$ 17.35M

m.

$ 19.81M

n.

$ 19.60M

o.

None of the answers

p.

$ 19.06M