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3. CPA Exam The ARC Radio Company is trying to decide whether to introduce as a new product a wrist "radiowatch" designed for shortwave reception of exact time as broadcast by the National Bureau of Standards. The "radiowatch"would be priced at $60, which is exactly twice the variable cost per unit to manufacture and sell it. The incremental fixed costs necessitated by introducing this new product would amount to $240,000 per year. Subjective estimates of the probable demand for the product are shown in the following probability distribution: Annual Demand 6,000 8,000 10,000 12,000 14,000 16,000 Probability 0.2 0.2 0.2 0.2 0.1 0.1 The expected value of demand for the new product is (a) 11,000 units (b) 10,200 units (c) 9000 units (d) 10,600 units (e) 9800 units