Please show your work and please do it on excel. Try to show as many details as possible.

A B C D E F. G H J K L M N 0 Students 1 2 Option 1 Unit Cost Yield * Probability Clarkson Products Inc. of Clarkson, New York has the option of a) proceeding immediately with the purchase of a new top-of-the line stereo system TV that has just completed prototype testing or option b.) Having the value analysis team complete a study. 3 Expected Payoff Best Option: Select A orr B 4 5 Unit Cost Units*Price Units*Price Unit Cost Units*Price Units*Price If Ed, VP of Operations, proceeds with the existing prototype (option A) the firm can expect: Sales to be 150,000 units @ $650 each with a probability of .6 or Sales to be 125,000 @ $650 each with a probability of .4 6 7 Option 2 Unit Cost Yield * Probability Expected Payoff 8 We select the highest EMV in this question. We are considering payoff and investment here If he uses the Value Analysis team (option B) the firm expect: Sales to be 125,000 units @ $850 with a probability of 7 or Sales to be 120,000 units @ $850 each with a probability of 3 Note: Value analysis at a cost of $175,000 is only used in Option B Further note: Market Value Predictions always have to subtract potential costs! 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24