If Acme company (HW_04.xlsx) makes the following changes from our demonstrated example in its bid: 

1) change the fixed cost to $8000; 

2) change probabilities of Great, Fair and Awful to 0.55, 0.30, and 0.15 respectively; 

3) the unit margin is $15.

Please reconsider that 1) whether Acme company should market the new product or abandon it, and 2) perform the sensitivity analysis if all sales volumes are decreased by 5%, 10%, 15%, and 20%. 

 

Acme single-stage new product decision Decision 1: Continue development and market the new product Fixed cost % decrease in all sales volumes 0% $8,000 EMV for decision 1 Unit margin $15 sensitivity analysis to percentage decrease in all sales volumes %decrease Probability Sales volume Net revenue EMV for decision 1 Market 0.55 600 Great 5% 0.30 300 Fair 10% Awful 0.15 90 15% EMV 20% Decision 2: Stop development and abandon product No payoffs, no costs, no uncertainty EMV