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Question 17 5 pts A product is being considered and the market for the item may be Favorable or Unfavorable, the company must decide if
Question 17 5 pts A product is being considered and the market for the item may be Favorable or Unfavorable, the company must decide if it is worth having the product reviewed by professionals. If the product is successful the profit is $750,000 if the product is a failure then a negative payoff of $-250,000 results. Probability of Favorable =0.80 Should you have the product reviewed? Success 750 Accept 0.75 6 Failure - 250 0.25 Favorable 4 Success 0.75 Reject 7 Failure 0.25 Review 2 Success 0.417 750 Accept og Failure 0.583 -250 8 Failure 0.583 -250 Unfavorable 5 Success 0.417 0 Reject 9 1 Failure 0.583 Success 0.65 750 Accept 10 Failure 0.35 - 250 Do Not Review 3 Success 0.65 Reject (11) Failure 0.35 No, because the EV is lower for Review than Do Not Review Yes, because the EV is higher for Review than Do Not Review, Yes, because the EV for Don Not Review is equal to the EV for Review Yes, because the EV is higher for Do Not Review than Review
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