Question
Fiam Industries projects the following revenues from their competitor's possible strategies choices: Competitor's Strategy Probability of Competitor's Strategy Fiam 's Revenue ($millions) Expand Production 0.19
Fiam Industries projects the following revenues from their competitor's possible strategies choices:
Competitor's Strategy | Probability of Competitor's Strategy | Fiam's Revenue ($millions) | ||
Expand Production | 0.19 | 1,187.1 | ||
Reduce Production | 0.2 | 3,005.6 |
Fiam projects revenue of $2,428 million if their competitor's production is unchanged.
Further, Fiam Industries faces altered total cost due to potential government regulations. They believe that new regulations will be imposed with a probability of 0.1. These new regulations will result in a total cost of $1,532.4 million.If the regulations remain unchanged, then Fiam projects a total cost of $981.1 million.
Calculate Fiam's expected profit. Round your answer to one decimal.
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