Question $10\mathrm{.}643/9$ points

Techware Incorporated is considering the introduction of two new software products to the market. In particular, the company has four options regarding these two proposed products: introduce neither product, introduce product I only, introduce product $2$ only, or introduce both products. Research and development costs for products $1$ and $2$ are $$170,000$ and $$130,000,$ respectively. Note that the first option entails no costs because research and development efforts have not yet begun. The success of these software products depends on the trend of the national economy in the coming year and on the consumers' reaction to these products. The company's revenues earned by introducing product $1$ only, product $2$ only, or both products in various states of the national economy are given in the table below.

Strong

Fair

Weak

Introduce Product $1$ only

$$500,000$

$$260,000$

$$120,000$

Introduce Product $2$ only

$$420,000$

$$230,000$

$$110,000$

Introduce both products

$$820,000$

$$390,000$

$$200,000$

The probabilities of observing a strong, fair, or weak trend in the national economy in the coming year are assessed to be $0\mathrm{.}20,0\mathrm{.}50,$ and $0\mathrm{.}30,$ respectively. The following payoff table is built. Match the numbered blanks with correct values.

States of nature$->$

Decision alternatives $$

$(4)$

$(5)$

EMV

$(1)$

$$290,000$

$(7)$

$(2)$

$(6)$

$(8)$

$(3)$

$$520,000$

$(9)$

$$0$

Probability

$0\mathrm{.}30$

$\_\_3\_\_$

Both P$1$ and P$2$

$\_\_\_\_\_$

$$119,000$

$\_\_8\_\_$

$-$$$20,000$

$\_\_5\_\_$

Strong

$\_\_\_\_\_$

Weak

$\_\_7\_\_$

$$96,000$

$\_\_9\_\_$

$$102,000$

$\_\_4\_\_$

Fair

$\_\_\_\_\_$

$$90,000$

$\_\_1\_\_$

P$1$ only

$\_\_\_\_\_$

Neither

$\_\_2\_\_$

P$2$ only

$\_\_3\_\_$

$$330,000$

$\_\_\_\_\_$

$-$$$50,000$

$1.$

$1$

$2.$

$2$

$3.$

$3$

$4.$

$4$

$5.$

$5$

$6.$

$6$

$7.$

$7$

$8.$

$8$

$9.$

$9$

$10.$

N$/$A

Question $21/1$ point

What is the best alternative according to the EMV method?

Question options:

Neither

P$1$ only

P$2$ only

Both P$1$ and P$2$