QUESTION TWO [25]

Dettol Inc sells electronic equipment and is about to launch a new product onto the market. It needs to prepare its budget for the coming year and is trying to decide whether to launch the product at a price of R30 or R35 per unit. The following information has been obtained from market research: Price per unit R30 Probability Sales volume Price per unit R35 Probability Sales volume 0.4 120 000 0.3 108 000 0.5