Netflix received a comedy movie proposal written by a Canadian writer. After reading the script, the editor estimated that if the movie becomes successful (S), the Netflix will gain a profit of $2,500,000. If unsuccessful (US), Netflix will lose $800,000. Based on past experience, the movie will be successful with probability 0.54.

To decide on accepting or rejecting the movie for production, the editor is considering sending out the movie for in-depth market research. The process predicts that the movie will be either promising (P) or unpromising (UP). If the movie is going to be successful, the review will provide a promising prediction with probability 0.8. However, if it is going to be unsuccessful, the review process will suggest it to be unpromising with probability 0.75.

a) If Netflix can gain an expected profit of $1,200,000 with the additional information given by the market research, what is the efficiency of this information? If the review process costs $20,000, what do you recommend to the company?