Question
XYZ Software can develop either a simple or a complex product.The simple product has projected revenue of $1 million, costs of $200,000 and a launch
XYZ Software can develop either a simple or a complex product.The simple product has projected revenue of $1 million, costs of $200,000 and a launch rate of 50%.The complex product has projected revenue of $3 million, costs of $800,000 and a launch rate of 40%.Products that aren't launched incur full costs but capture no revenue.Based on this information, XYZ should develop
A. the simple product, which has an expected cost of $100,000 vs. $320,000 for the complex product.
B. either product, because their expected profits are equal.
C. the complex product, which has an expected profit of $400,000 vs. $300,000 for the simple product.
D. neither product, since their expected profits are both negative.
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