successful testing. . Launching the product will cost $150000 and the estimates of profit are as follows: o Highly successful = $3000000 o Moderately successful = $1500000 o Low level success = $1000000 o Failure = $100000. . The historic data that has been collected gives the following results: Product testing Chance of No testing Product testing & market testing High success 0.1 0.1 0.2 Medium success 0.2 0.4 0.45 Low success 0.4 0.4 0.3 Failure 0.3 0.1 0.05 Product testing costs $50000 and Market testing costs $100000. . Should the product fail either of these tests it is abandoned. . The probability of passing product testing is 0.8 and the probability of passing market testing is 0.9. The alternative to this process is to sell the product design for $250000. Q1: Calculate EV of launch without test? (30 marks) Q2: Calculate EV of launch with product test? (30 marks) Q3: Calculate EV of launch with product and market test? (30 marks) Q4: What do you advise the company to do? (10 marks)