The next 15 questions refer to the following scenario:

A car manufacturer can launch either a new luxury sedan (L) or a new high-performance sports car (S).

• The car company expects that there is a p=0.7 chance that the luxury sedan will be a hit, and a (1-p)=0.3 chance that it will be a flop.
• The car company expects that there is a q=0.6 chance that the high-performance sports car will be a hit, and a (1-q) = 0.4 chance that it will be a flop.
• If the luxury sedan will be a hit, the company earns $3 Million; if it is a flop, it still earns $2 Million.
• If the high-performance sports car will be a hit, the company earns $6 Million; if it is a flop, it loses $2 Million.

uuesuon 11 {1 pomu What is the manager's expected utility from launching the high-performance sports car? C) 351.39 C) 353.14 C) 356.31 C) 353.25 Question 12 (1 point) Measured by the expected utility, which statement is true? The manager 0 will launch the luxury sedan Q will launch the high-performance sports car 0 is indifferent between launching the luxury sedan and the high-performance sports car. 0 should launch a high-performance luxury sedan without any market study. Question 13 (1 point) Holding constant p an q, the payoffs for the luxury sedan under each scenario, and the payoff for the high-performance sports car under the flop scenario, how big would the payoff for the high performance sports under the hit scenario have to be for the manager to choose the high-performance sports car? (Round to full numbers zero decimals). 0 $2,425,356 0 $4,253,333 0 $5,425,352 0 $6,425,352 Question 8 (1 point) If the manager decides to launch the high-performance sports car and it is a hit, what will be the manager's total income? 0 $30,000 O $120,000 0 $130,000 O $160,000 Question 9 (1 point) If the manager decides to launch the high-performance sports care and it is a flop, what will be the manager's total income? O $30,000 0 $120,000 O $130,000 O $160,000 Question 10 (1 point) What is the manager's expected utility from launching the luxury sedan? C) 351.89 O 353.14 O 356.31 O 358.25