A sporting-goods storeowner has the opportunity to purchase a lot of 50,000 footballs for $100,000. He believes

Question:

A sporting-goods storeowner has the opportunity to purchase a lot of 50,000 footballs for $100,000. He believes that he can sell some or all by taking out mail-order advertisements in a magazine. Each football will be sold for $6. The advertising cost is $25,000, and the mailing cost per football is $1. He believes that the demand distribution is as follows.

Demand.................................................. P(Demand)
10,000............................................................. .2
30,000 ............................................................. .5
50,000............................................................. .3

What is the maximum price the owner should pay for additional information about demand?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...