The P & A Manufacturing Company has been approached by an individual who has an idea for a new product. He wants to sell this idea for

P30,000 pesos. If the idea is purchased, the product must be developed. The company can develop the product at a cost of P60,000, and

there is a 50% chance that they can develop the product. RSV firm has offered to develop the product. It will also cost P60,000, but they

are only 40% certain that they can develop the product. No charge will be levied unless the job is successful. If the product is developed, it

must be advertised. There are two plans of advertisement. Plan A which costs P50,000 with 75% chances of success and Plan B which

costs P30,000 with 50% probability of success. The management believes that if the product is a success, the return will be P800 million.

Should the company purchase the idea? Who should develop the product? Which plan of advertisement should be adopted?