Question: Johnson Software has developed a new software package. The companys marketing department has prepared the following forecasts for the new software with probability distributions describing

  1. Johnson Software has developed a new software package. The companys marketing department has prepared the following forecasts for the new software with probability distributions describing the likely levels of sales and income (or loss) under each scenario.

    Monthly Sales (units)

    Probability

    Income (Loss)

    10,000

    20%

    $14,000

    20,000

    30%

    $10,000

    30,000

    30%

    $30,000

    40,000

    20%

    $60,000

    If Johnson goes ahead to market its new software package what is the expected monthly gain in income that it should include in its plan for the coming year?

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