The new business venture, Best-In-World, has been manufacturing technology devices for over20 years and is considering adding a new technology device to its music line. They have an established reputation for building quality devices, but they are rather novice in the music industry. The Chief Innovation and Design Officer, Julie Naugle-Hall, is tasked with hiring a marketing firm to conduct a survey to determine the feasibility and demand for their new music device. The follow decision table illustrates the potential payoffs for a high demand, moderate demand and low demand for the new music device. The decision will be whether to start production on this new device in small scale, large scale or not at all.

Decision Table

State of Nature

Alternatives High Demand Moderate Demand Low Demand

Small-scale production 1,000,000 450,000 -300,000

Large-scale production 1,800,000 1,000,000 -1,000,000

No production 0 0 0

Probabilities 0.40 0.35 0.25

Step3of3:How much should Julie be willing to pay a marketing firm to conduct the survey for probability information regarding the feasibility and demand for their new music device?