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MacDonald Products, Inc, of Clarkson, New York, has the option of (a) proceeding immedialaly with production of a now top-ot the line slereo TV that
MacDonald Products, Inc, of Clarkson, New York, has the option of (a) proceeding immedialaly with production of a now top-ot the line slereo TV that has jut comphted prolotype besting or (b) having the value analysis team complete a stusy. $600. If, however, he uses the value analysis team (option b), the firms expects sales of 90,000 unts at $730, with a protability of 0.85 and a 0.35 probablity of 60,000 unte at $730. Value engineoring, at a cost of $95,000, is only used in option b. Which opton has the highent expected monetary volue (EMV)? The EMV for option a is 1 and the EMrV for option b is 1 Therefore, estion has the Nighest expected mocwary value. [Enteryour responses as integen,]
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