Asked by Hailee Celeste on Mar 10, 2024
Verified
What is the expected revenue from developing the complicated software?
A) $10million
B) $15million
C) $20million
D) $50million
Thought-Activated
Technology or systems that are controlled by the user's thoughts or brain signals, often used in assistive devices and interfaces.
Expected Revenue
The projected amount of money a company anticipates generating from the sales of goods or services over a certain period.
- Utilize the notion of expected value in real-life contexts, including amusement park games and choices in the development of software.
Verified Answer
YV
Yesenia VenegasMar 10, 2024
Final Answer :
B
Explanation :
To calculate the expected revenue, we need to multiply the probability of a successful launch with the revenue generated:
Expected revenue from the complicated software = 0.3 x $50million = $15million
Expected revenue from the simple software = 0.8 x $10million = $8million
Total cost of complicated software = $10million
Total cost of simple software = $2million
Expected profit from complicated software = $15million - $10million = $5million
Expected profit from simple software = $8million - $2million = $6million
Since the expected profit is higher for developing the simple software, it is the best choice.
Expected revenue from the complicated software = 0.3 x $50million = $15million
Expected revenue from the simple software = 0.8 x $10million = $8million
Total cost of complicated software = $10million
Total cost of simple software = $2million
Expected profit from complicated software = $15million - $10million = $5million
Expected profit from simple software = $8million - $2million = $6million
Since the expected profit is higher for developing the simple software, it is the best choice.
Learning Objectives
- Utilize the notion of expected value in real-life contexts, including amusement park games and choices in the development of software.