Question
In: Finance
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit...
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next:
|
Possible |
Sales |
Probabilities |
|
Low response |
20 |
.10 |
|
Moderate response |
40 |
.30 |
|
High response |
55 |
.40 |
|
Very high response |
70 |
.20 |
a. What is the expected value of unit sales for the new product?
b. What is the standard deviation of unit sales?
Solutions
Expert Solution
Solution :
a. The expected value of unit sales for the new product = 50 Units
b. The standard deviation of unit sales = 14.49 Units
Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.
jeff jeffy answered 1 year agoRelated Solutions
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit...
Myers Business Systems is evaluating the introduction of a new
product. The possible levels of unit sales and the probabilities of
their occurrence are given next:
Possible
Market Reaction
Sales in
Units
Probabilities
Low
response
20
.30
Moderate
response
35
.20
High
response
45
.20
Very high
response
60
.30
b. What is the standard deviation of unit
sales? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit...
Myers Business Systems is evaluating the introduction of a new
product. The possible levels of unit sales and the probabilities of
their occurrence are given next:
Possible
Market Reaction
Sales in
Units
Probabilities
Low response
10
.20
Moderate response
50
.30
High response
70
.40
Very high response
90
.10
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