Question: 4. Blizzard Entertainment is planning to develop a new online game called World of Starcraft. The protability of World of Starcraft will depend on the

 4. Blizzard Entertainment is planning to develop a new online game

4. Blizzard Entertainment is planning to develop a new online game called World of Starcraft. The protability of World of Starcraft will depend on the following factors: 0 Developing the game takes time, and no revenue will be generated during game development. Time for game development can take one to three years with the following probabilities: 0 The cost for game development varies between years. In the rst year, it follows a triangular distribution with a minimum of $2 million, a maximum of $20 million, and a most likely value of $7 million. In year 2, it follows a triangular distribution with a minimum of $1 million, a maximum of $10 million, and a most likely value of $5 million. In year 3, it follows a triangular distribution with a minimum of $1 million, a maximum of $5 million, and a most likely value of $3 million. For example, if the game development takes 2 years, only year 1 and 2 costs will be inCurred. 0 Blizzard needs to determine the advertising budget to spend during game development. This advertising budget will affect demand of the game once it is launched. 0 The game will be sold for 4 years after its development is completed. Game sales for each year are normally distributed with a standard deviation of $2 million, but the mean sales are different each year. The mean sales in the 15' year is given by $10 million X [1 + e x 1/Adverrising budget (millions)], where E is a random variable uniformly distributed between 0.10 and 0.15

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