Frodo-Lay has a line of potato snacks named Spicy Curls. The snacks are solid in10 ounce packages at a profit of $0.50 per package. Sales of Spicy Curls have been stable at 100,000 per year and are expected to continue at this level in future under present circumstances. 

Marketing is considering two possible advertising campaigns: a local campaign for$10,000 and a regional campaign for $100,000. 

Projections have been made for sales under each campaign: 

100K (probability local: 0.3, probability regional: 0.1),

200K (0.4, 0.2), 300K (0.1, 0.2), 400K (0.1, 0.2), and 

500K (0.1, 0.3).

There is sufficient production capacity to maintain the current profit margin for atleast 500K units. 

What is the EV for no advertising campaign?
 What is the EV for the local campaign?
 What is the EV for the regional campaign?
Which marketing campaign should be proposed?

At what profit per package would there be indifference between the local and regional marketing campaigns? (At least 3 decimal places.)

Answer rating: 100% (QA)

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