Simulation Singleton Supplies Corporation (SSC) manufactures medical products for hospitals, clinics, and nursing homes. SSC may introduce a new type of X-ray scanner designed to identify certain types of cancers in their early stages. There are a number of uncertainties about the proposed project, but the following data are believed to be reasonably accurate: Probability 0.3 0.4 0.3 Developmental Costs $2,000,000 4,000,000 6,000,000 Random Numbers 00-29 30-69 70-99 Probability Project Life (Years) Random Numbers 0.2 3 00-19 0.6 8 20-79 0.2 13 80-99 Probability Sales in Units Random Numbers 0.2 100 00-19 0.6 200 20-79 0.2 300 80-99 Probability Sales Price Random Numbers 0.1 $12,500 00-09 0.8 13,000 10-89 0.1 13,500 90-99 Cost per Unit (Excluding Probability 0.3 Developmental Costs) Random Numbers $5,000 00-29 30-69 70-99 0.4 0.3 6,000 7,000 SSC uses a cost of capital of 13% to analyze average-risk projects such as this one. The firm is in the 25% federal-plus-state income tax bracket.