MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceedin

Question

MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing or (b) having the value analysis team complete a study If Ed Lusk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 120,000 units at $540 each, with a probability of 0.24 and a 0.76 probability of 70,000 at $540 lf, however, he uses the value analysis team option b the fi expects sales of 5 000 units at 730. it a probability and a 0.31 probability of 60,000 units at $730. Value engineering, at a cost of $105,000, is only used in option b. Which option has the highest expected monetary value (EMV)? The EMV for option a is $ and the EM for option b is $ Therefore, option ? has the highest expected monetary value. Enter your responses as integers.

Explanation / Answer

Answer:

So the option b has the highest monetary value   (Answer)

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