Create an excel Spreadsheet with conclusions on this case. On a sunny May morning, Marc Binton, CEO of Bay Area Automobile Gadgets $($BAAG$),$ enters the conference room on the $40$th floor of the Gates building in San Francisco, where BAAG$$s offices are located. The other executive officers of the company have already gathered. The meeting has only one item on its agenda: planning a research and development project to develop a new driver support system $($DSS$).$

Brian Huang, Manager of Research and Development, is walking around nervously. He has to inform the group about the R&D strategy he has developed for the DSS$.$ Marc has identified DSS as the strategic new product for the company. Julie Aker, Vice President of Marketing, will speak after Brian. She will give detailed information about the target segment, expected sales, and marketing costs associated with the introduction of the DSS$.$ Key Decision Points and Data:

Initial Decision: Invest in road scanning device research

Cost: $$300,000$

Research success probability: $80\%$

If no research: Can sell current DSS for $$2$M

If Research Successful:

Option to sell research to GM for $$500,000($but reduces current DSS value$)$

OR proceed to development stage

Development Stage $($if chosen$)$:

Cost: $$800,000$

Success probability: $65\%$

Failure probability: $35\%$

If failed: Can still sell DSS $($$$2$M$)+$ research to GM $($$$500,000)$

If Development Successful: Final decision point:

Option $1$: License product to GM for $$4$M $($current DSS becomes worthless$)$

Option $2$: Market the product themselves $($market uncertainties$)$

Additional Context:

BAAG is an automotive electronics company

DSS $($Driver Support System$)$ is a strategic new product

Project involves GPS$,$ voice recognition, and display technologies

Management seems split on risk tolerance