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Mountain Orthopedics is considering purchasing a Back Blaster 2000. Back Blaster 2000 (BB2) uses sound waves to alleviate back pain. The practice manager has run
Mountain Orthopedics is considering purchasing a Back Blaster 2000. Back Blaster 2000 (BB2) uses sound waves to alleviate back pain.
The practice manager has run the numbers on the BB2, but is still quite unsure of the portential demand for it.
Here are the best data the practice manager has arrived at:
Scenario Probability NPV
Low Demand 20% -250,750
Medium Demand 40% 150,000
High Demand 40% 400,000
What is the Expected Value of the Back Blaster 2000?
A.
$169,850
B.
$270,150
C.
$299,250
D.
$150,000
E.
none of these
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