Rebecca v My Home Courses Catalog and Study Tools Rental Options College Success Tips Career Success Tips Help Give Feedback H ng.cengage.com a MindTap - Cengage Learning '2: CENGAGE | MINDTAP Problems: Chapters 17, 19, and 20 Attempts I I Average I 2 3 . Individual Problems 1.7-4 Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of the extrusion machine. The company could keep it in inventory for a possible future product and estimates that the reservation value is $200,000. Your dealings 0n the secondhand market lead you to believe that if you commit to a price of $300,000, there is a 0.5 chance you will be able to sell the machine. If you commit to a price of $400,000, there is a 0.2 chance you will be able to sell the machine. If you commit to a price of $500,000, there is a 0.1 chance you will be able to sell the machine. These probabilities are summarized in the following table. For each posted pn'ce, enter the expected value of attempting to sell the machine at that price. (Hint: Be sure to take into account the value of the machine to your company in the event that you are not be able to sell the machine.) Posted Price Expected Value (3) Probability of Sale (3) $500,000 0.1 S $400,000 0.2 $ $300,000 0.5 3 Assume you must commit to one posted price. In order to maximize the expected prot of the potential sale, which posted price would you commit to in order to maximize the expected value of the potential sale of the machine? $500,000 $300,000 $400,000 Q Search this course 0X