A company that manufactures and sells T-shirts for sporting events, is providing shirts for an upcoming tournament. Each shirt will cost $7 to produce and will be sold for $13. Any unsold shirts at the end of the tournament can be sold for $5 apiece in the near future. The company assumes the demand for the shirts will be 1,500,3,000,4,500, or 6,000. The company also estimates that the probabilities of each of these sales levels occurring will be 20%, 25%,25%, and 30%, respectively. Determine the expected monetary value of the project if the company chooses to print 4,500 shirts for the tournament. The expected monetary value is---- (Type a whole number.)
A company that manufactures and sells T-shirts for sporting events, is providing shirts for an upcoming tournament. Each shirt will cost $7 to produce and will be sold for $13. Any unsold shirts at the end of the tournament can be sold for $5 apiece in the near future. The company assumes the demand for the shirts will be 1,500,3,000,4,500, or 6,000. The company also estimates that the probabilities of each of these sales levels occurring will be 20%, 25%,25%, and 30%, respectively. Determine the expected monetary value of the project if the company chooses to print 4,500 shirts for the tournament. The expected monetary value is---- (Type a whole number.)
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter17: Making Decisions With Uncertainty
Section: Chapter Questions
Problem 17.5IP
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A company that manufactures and sells T-shirts for sporting events, is providing shirts for an upcoming tournament. Each shirt will cost $7 to produce and will be sold for $13. Any unsold shirts at the end of the tournament can be sold for $5 apiece in the near future. The company assumes the demand for the shirts will be 1,500,3,000,4,500, or 6,000. The company also estimates that the probabilities of each of these sales levels occurring will be 20%, 25%,25%, and 30%, respectively. Determine the expected monetary value of the project if the company chooses to print 4,500 shirts for the tournament.
The expected monetary value is----
(Type a whole number.)
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