HW #1 - AEM 424 Homework#1 1 Software Marketing You have...

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AEM 424 Homework #1 1. Software Marketing You have developed a popular piece of business software that runs on the Windows platform. You recognize that the Linux platform is growing in popularity and have developed a version of the program to run on Linux. That development cost you $2 million, money that you have already spent. To sell the Linux version, however, you also must do a marketing campaign, which will cost $1 million. You aren't sure, however, whether Linux will be successful as a platform for business users. If it is, you will sell a lot of copies of your program for Linux (for a profit of $6m after production and distribution expenses, not counting development or marketing). If not, you will sell very few copies (for a profit of $500,000 after production and distribution expenses, not counting development or marketing). You estimate the probability of Linux succeeding at 0.7. a. What should the firm do? Draw a decision tree.
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