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MacDonald Products, Inc., of Clarkson, New York, has the option of ( a ) proceeding immediately with production of a new top - of -

MacDonald Products, Inc., of Clarkson, New York, has the option of
(a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing or
(b) having the value analysis team complete a study.
If Ed Lusk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 120,000 units at $560 each, with a probability of 0.59 and a 0.41 probability of 80,000 at $560. If, however, he uses the value analysis team (option b), the firm expects sales of 80,000 units at $740, with a probability of 0.75 and a 0.25 probability of 70,000 units at $740. Value engineering, at a cost of $110,000, is only used in option b. Which option has the highest expected monetary value (EMV)?
The EMV for option a is $ and the EMV for option b is $. Therefore, option has the highest expected monetary value. (Enter your responses as integers.)
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