Nadal Corp. is considering entering a foreign market to sell its Lightning tennis racquet. If Nadal enters the market and sells racquets, they would have to incur additional fixed costs of $100,000 and variable costs of $50/racquet. Revenues would increase by $150/racquet. Nadal forecasts that sales in the foreign market will be either 700, or 1,500, with corresponding probabilities of .4, and .6, respectively.

1. Should Nadal enter the foreign market? Why?