Unit 4 Homework 5.15

Unit 4 Homework 5.15 - Option A Revenue at 100,000 units...

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Option A Revenue at 100,000 units \$550 x 100,000 = \$55,000,000 Revenue at 75,000 units \$550 x 75,000 = \$41,250,000 EMV = \$49,500,000 Option B Revenue at 75,000 units \$750 x 75,000 = \$56,250,000 Revenue at 70,000 units \$750 x 70,000 = \$52,500,000 Expected Revenue = \$56,250,000 x .7 + \$52,500,000 x .3 = \$55,125,000

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Unformatted text preview: EMV = \$55,125,000 - 100,000 = \$55,025,000 Opton B has The highesT EMV. Expected Revenue = \$55,000,000 x 0.6 + \$41,250,000 x .4 = \$49,500,000 55000000 41250000 49500000 56250000 52500000 55125000 55025000 Double ü...
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