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MacDonald Products, Inc, of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-ot-the-ine stereo TV that has just

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MacDonald Products, Inc, of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-ot-the-ine stereo TV that has just completed prototype testing or (b) having the value analysis team complete a study. H. Ed Lisk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 80,000 units at 5620 each, with a probability of 0.35 and a 0.65 probabiliy of 6 \$620. If, however, he uses the value analysis team (option b), the firm expects sales of 85,000 units at $700, with a probability of 0.75 and a 0.25 probablity of 60,000 units at $700. Vaiue engineering, at a cost of $120,000, 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 cotion b is 5 Therefore, option has the highest expecied monetary value. (Enter your rosponses as integers)

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