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Question:

Calculate the expected monetary value of making the product?

A
$37,250

Explaination

Getting this question correct involves knowing how to calculate the expected monetary value, as well as understanding decision tree analysis. The correct answer is $37,250. Based on the question, our focus is on the make scenario. To calculate the expected monetary value, take the impact of $15,000 and multiply it by the probability of 15 percent, and then add the initial investment of $35,000.

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