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

Probability0.70.10.2Units1,300,000416,0000Philippines

Probability 0.20.30.5Units 600,000360,0000Singapore

Probability 0.40.30.3Units 1,500,000750,0000

The product sells for $20, and each unit has a constant marginal cost of $16. Assume that the (fixed) cost of entering the market (regardless of which market you select) is $500,000.

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 expectedprofit?

Singapore

Philippines

Malaysia