(Related to Checkpoint 13.1) (Calculating expected revenues) The owner of the Pe

Question

(Related to Checkpoint 13.1) (Calculating expected revenues) The owner of the Petreno Pharmaceutical Company is evaluating the expected annual sales for a new line of facial care products and estimates that there is a 68 percent chance that the product line will be extremely successful, in which case it will generate sales next year of 8.4 million. However, since the new product line has a unique appeal that will require substantial advertising by its manufacturer to gain consumer acceptance, there is a 32 percent chance that revenues for next year will be a modest 1.1 million. What is the expected level of revenues for the new product line? The expected total revenue for the new line of products is $million. (Round to two decimal places.)

Explanation / Answer

The expected total revenue for the new line of products is

=68%*8.4+32%*1.1

=6.06 million

the above is answer..

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