Transcendent Technologles is deciding between developing a complicated thought$-$actlvated software, or a simple voice$-$

activated software. Since the thought$-$activated software is complicated, it only has a $30\%$ chance of actually going through to

a successful launch, but would generate revenues of $$50$ million if launched. The voice$-$activated software is simple and

hence has a $80\%$ chance of being launched but only generates a revenue of $$10$ million. The complicated technology costs $10$

million, whereas the simple technology costs $2$ million.

Use Scenario $17-1$

The firm learns that the probability of launch estimated for the voice$-$activated software was too optimistic and instead is

actually $65\%.$ Is it still worth for the company to develop the simplified software?

No$,$ because the expected return is lower

No$,$ because the expected return is higher

Yes, because the expected return is higher