Question: The owner of the Crusik Distribution Company is evaluating the
The owner of the Crusik Distribution Company is evaluating the expected annual sales for a new line of facial care products and estimates that there is a 50 percent chance that the product line will be extremely successful, in which case it will generate sales next year of $5 million. However, because the new product line has a unique appeal that will require substantial advertising by its manufacturer to gain consumer acceptance, there is a 50 percent chance that revenues for next year will be a modest $1 million. What is the expected level of revenues for the new product line?
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