Perform a sensitivity analysis on the probability of a great market. To do this, enter formulas in
Question:
Perform a sensitivity analysis on the probability of a great market. To do this, enter formulas in cells B9 and B10 (see Figure 6.4) to ensure that the probabilities of "fair" and "awful" remain in the same ratio, 35 to 20, and that all three probabilities continue to sum to 1. Then let the probability of "great" vary from 0.25 to 0.50 in increments of 0.05. Is it ever best to abandon the product in this range?
Transcribed Image Text:
3 Decision 1: Continue development and market the new product 4 Fixed cost 5 Unit margin 18 7 Market 8 Great 9 Fair 10 Awful All monetary values (except the unit margin in cell B5) are in $1000s, and all sales volumes are in 1000s of units. Probabili 0.45 0.35 0.20 Sales volume 600 300 90 Net revenue 10,800 $5,400 $1,620 $1,074 13 14 Decision 2: Stop deve lopment and abandon product 15 No payoffs, no costs, no uncertainty $0
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (6 reviews)
Acme singlestage new product decision Decision 1 Continue developme...View the full answer
Answered By
Hassan Ali
I am an electrical engineer with Master in Management (Engineering). I have been teaching for more than 10years and still helping a a lot of students online and in person. In addition to that, I not only have theoretical experience but also have practical experience by working on different managerial positions in different companies. Now I am running my own company successfully which I launched in 2019. I can provide complete guidance in the following fields. System engineering management, research and lab reports, power transmission, utilisation and distribution, generators and motors, organizational behaviour, essay writing, general management, digital system design, control system, business and leadership.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Business Analytics Data Analysis and Decision Making
ISBN: 978-1305947542
6th edition
Authors: S. Christian Albright, Wayne L. Winston
Question Posted:
Students also viewed these Statistics questions
-
Using a data table in Excel, perform a sensitivity analysis on the example in Simple Decision Problem.xlsx. Specifically, keep the probabilities in row 10 (for D2) as they are, but vary the...
-
In the Acme problem, perform a sensitivity analysis on the quantity sold from a great national market (the value in cell B11). Let this value vary over a range of values greater than the current...
-
Mr. Maloy has just bought a new $30,000 sport utility vehicle. As a reasonably safe driver, he believes that there is only about a 5% chance of being in an accident in the coming year. If he is...
-
In a recent survey, 80% of the community favored building a police substation in their neighborhood. If 20 citizens are chosen, what is the mean and standard deviation for the number favoring the...
-
Crenshaw uses a job order costing system to account for projects. It applies Manufacturing overhead to jobs on the basis of direct labor hours and pays its direct labor workers $25 per hour. The...
-
Figure P12.15 shows a claw hammer as it is being used to pull a nail out of a horizontal board. If a force of 150 N is exerted horizontally as shown, find (a) The force exerted by the hammer claws on...
-
Disney is considering entering into a joint venture to build condominiums in Vail, Colorado, with a local real estate developer. The development is expected to cost \($1\) billion overall and, based...
-
Pratt Agriculture sells approximately 600,000 bushels of grain each month. On January 1, 2011, Pratt purchased an option to sell 600,000 bushels of grain on January 1, 2013, at a price of $1.25 per...
-
Please do not type in this area Marks Total Earned Marks General Journal 18 Sales Journal 15 Cash Receipts Journal 25 Purchase Journal 14 Cash Payments Journal 28 Late Penalty (if applicable) 0 100
-
The fish department of the local grocery store faces unique problems. Fish is extremely perishable and can only be sold on the day it arrives in the store. Fish is delivered at 3 am and can be sold...
-
The fixed cost of $6 million in the Acme problem is evidently not large enough to make Acme abandon the product at the current time. How large would the fixed cost need to be to make the abandon...
-
Sometimes it is possible for a company to influence the uncertain outcomes in a favorable direction. Suppose Acme could, by an early marketing blitz, change the probabilities of "great," "fair," and...
-
99% Find the critical value zA,2 that corresponds to the given confidence level.
-
Expected Standard Asset Consider the following four risky assets: Correlations Firm 1 Firm 2 Firm 3 Firm 4 Returns Deviation Firm 1 7.00% 15.00% Firm 1 1 0.31 0.25 0.05 Firm 2 9.00% 22.00% Firm 2...
-
A Instructions 294,000 Washington Company has the following stockholders' equity accounts at December 31, 2025. Common Stock ($100 par value, authorized 8,000 shares) $480,000 Retained Earnings a....
-
On January 1, 2021, Sunland Property Management Inc. introduced a stock-based compensation plan for its senior executives. The company has a December 31, 2021 year-end and the following events...
-
company had 5,000 partially completed units in beginning work-in-process inventory. This period, after the 5,000 beginning inventory units were completed, another 35,000 units were started. At the...
-
What is the importance of accounting for risks , studying trends, relying on experience, and utilizing reports for job planning.
-
Tony owns a small business that he is attempting to sell. A potential buyer offers him $500,000 today, plus $1,500,000 two years from now and a balance of $1,700,000 three years from now. Tony always...
-
In Exercises 1-2, rewrite each verbal statement as an equation. Then decide whether the statement is true or false. Justify your answer. 1. The logarithm of the difference of two numbers is equal to...
-
Prepare a 2017 balance sheet for Jarrow Corp. based on the following information: cash = $168,000; patents and copyrights = $827,000; accounts payable = $429,000; accounts receivable = $237,000;...
-
Huang, Inc., is obligated to pay its creditors $11,600 very soon. a. What is the market value of the shareholders equity if assets have a market value of $15,100? b. What if assets equal $9,900?
-
In the previous problem, suppose Raines Umbrella Corp. paid out $75,000 in cash dividends. Is this possible? If net capital spending and the change in net working capital were both zero, and if no...
-
A rare gem known as Tanzanite is found only in the country of Tanzania. Because no mines have been discovered in other countries, Tanzania would production of this gem. A. absolute OB. comparative...
-
tion 3 of 21 > O Macmillan Learning What is Uganda's real GDP if its nominal GDP is $27.5 billion (in current US$), and the GDP deflator is 163.4? $16.8 billion $44.9 billion $27.5 billion $12.4...
-
Price D Demand D Quantity Consider the graph shown here. An increase in the price of a complement would be represented by a movement from Selected Answer: Answers: B to A. A to B. B to A. D1 to D2....
Study smarter with the SolutionInn App