Saswati wants to introduce a new detergent nationally. Currently, Saswati wants to introduce the detergent to a small test market, the Phoenix metropolitan area. The good news is that the cost of running the test is only $200,000. The bad news is that the results from Phoenix is not a perfect predictor for the response nationwide. Probability estimates are listed below: 

• P[national successful roll-out | Phoenix successful roll-out] = 0.80 

P[national not a success | Phoenix not a successful roll-out] = 0.90

P[Phoenix successful roll-out] = 0.40 

The projected profit from a successful national roll-out of the detergent is $2 million, whereas failure of the product would result in a loss of $1 million. 

Select the least accurate answer below.

A.The expect profit for this project is $360,000.

B.If the cost of runing the test in Phoenix increases to $250,000, Saswati should not run the test.

C.It turns out running the test in the Greater Los Angeles area is a perfect indicator of the national market. Then paying $260,000 for the test run in Los Angeles instead of Phoenix is profitable for Saswati.

D.Given Phoenix successful roll-out, expect profit from engaging the national roll-out is $1400,000.

E.Given Phoenix not a successful roll-out, expect profit from engaging the national roll-out is -$700,000.

Answer rating: 100% (QA)

Based on the given information the least accurate answer is A The expect profit for this project is ... View the full answer