Question
Malaysia You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market
Malaysia
You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table:
| Success Level | |||
|---|---|---|---|
| Big | Mediocre | Failure | |
| Malaysia | |||
| Probability | 0.7 | 0.1 | 0.2 |
| Units | 1,100,000 | 352,000 | 0 |
| Philippines | |||
| Probability | 0.4 | 0.3 | 0.3 |
| Units | 800,000 | 480,000 | 0 |
| Singapore | |||
| Probability | 0.2 | 0.3 | 0.5 |
| Units | 1,300,000 | 650,000 | 0 |
The product sells for $10, and each unit has a constant marginal cost of $8. Assume that the (fixed) cost of entering the market (regardless of which market you select) is $250,000.
In the following table, enter the expected number of units sold, and the expected profit, from entering each market.
| Market | Expected Number of Units Sold | Expected Profit |
|---|---|---|
| Malaysia | ??? | ??? |
| Philippines | ??? | ??? |
| Singapore | ???? | ??? |
If you were to enter one of the previously described markets, which one would you enter in order to earn the highest expected profit?
A) Malaysia
B) Philippines
C) Singapore
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587
