Melissa Rossi,Product Manager at National Consumers,Inc.(NCI),is evaluating alternatives for introducing a new package for toothpaste.She has identified four alternative markets,and has constructed the following table which shows NCI's rewards (in $1,000,000's)for various levels of acceptance by the markets and their probabilities: The EMV of introducing the new package in the "Northeast only" market is ___.

Question

Melissa Rossi,Product Manager at National Consumers,Inc.(NCI),is evaluating alternatives for introducing a new package for toothpaste.She has identified four alternative markets,and has constructed the following table which shows NCI's rewards (in $1,000,000's)for various levels of acceptance by the markets and their probabilities:  The EMV of introducing the new package in the "Northeast only" market is ___.

Quizplus · Accepted Answer

To calculate the expected monetary value (EMV) for each market, we multiply the reward by the probability of acceptance and sum up the products. 
For the "Northeast only" market, the EMV is (30 x 0.1) + (50 x 0.3) + (90 x 0.4) + (100 x 0.2) = $9 + $15 + $36 + $20 = $70 million. 
Comparing this with the EMVs of the other markets, the best choice is to introduce the new package in the Northeast only market. Therefore, the answer is C.