A company wants to know whether or not a new shaving cream should be marketed. The present value of all future profits f
Posted: Sat Mar 19, 2022 6:01 pm
A company wants to know whether or not a new shaving cream
should be marketed. The present value of all future profits for the
success of the cream is Ksh.10, 000,000 and its failure would
result in a net loss of ksh.5, 000,000. Not marketing it would not
change the profits. The chances of the success of the new cream are
50%
Construct the payoff table
Which act will maximize the payoff?
What is expected payoff under uncertainty?
What is EVPI? What is the minimum expected opportunity
loss? [8marks}
should be marketed. The present value of all future profits for the
success of the cream is Ksh.10, 000,000 and its failure would
result in a net loss of ksh.5, 000,000. Not marketing it would not
change the profits. The chances of the success of the new cream are
50%
Construct the payoff table
Which act will maximize the payoff?
What is expected payoff under uncertainty?
What is EVPI? What is the minimum expected opportunity
loss? [8marks}