Comerstone Solutions, LLC. is deciding between developing an advanced thought-activated software, or a basic 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 $50million if launched. The voice-activated software is simple and hence has a 80% chance of being launched but only generates a revenue of $10million. Assume that an unsuccessful product launch will generate no revenue. The complicated technology costs 10million, whereas the simple technology costs 2million. (However...) Suppose Cornerstone Solutions, LLC. leams that the complicated technology can be made more stable with a few tweaks increasing the price to 15.5 million and increasing the probability of a launch to 50%. Given the new costs and probabilities of launch for the complicated software, which technology would the firm rather invest in now? O The simple voice-activated software O The complicated thought-activated software O Neither of the software O Need more information

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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Comerstone Solutions, LLC. is deciding between developing an advanced thought-activated software, or a basic 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 $50million if launched. The voice-activated software is simple and hence has a 80% chance of being
launched but only generates a revenue of $10million. Assume that an unsuccessful product launch will generate no revenue.
The complicated technology costs 10million, whereas the simple technology costs 2million.
(However...)
Suppose Cornerstone Solutions, LLC. learns that the complicated technology can be made more stable with a few tweaks increasing the
price to 15.5 million and increasing the probability of a launch to 50%. Given the new costs and probabilities of launch for the
complicated software, which technology would the firm rather invest in now?
O The simple voice-activated software
O The complicated thought-activated software
O Neither of the software
O Need more information
Transcribed Image Text:Comerstone Solutions, LLC. is deciding between developing an advanced thought-activated software, or a basic 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 $50million if launched. The voice-activated software is simple and hence has a 80% chance of being launched but only generates a revenue of $10million. Assume that an unsuccessful product launch will generate no revenue. The complicated technology costs 10million, whereas the simple technology costs 2million. (However...) Suppose Cornerstone Solutions, LLC. learns that the complicated technology can be made more stable with a few tweaks increasing the price to 15.5 million and increasing the probability of a launch to 50%. Given the new costs and probabilities of launch for the complicated software, which technology would the firm rather invest in now? O The simple voice-activated software O The complicated thought-activated software O Neither of the software O Need more information
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