User Account

All Pages

Obtaining better forecast of the app profitability

Assignment Help Operation Management
Reference no: EM131756498

A small software developer has received an offer from a larger software company to purchase the rights to one of its apps for $120,000. The developer has estimated the probability distribution of profitability outcomes over the app’s lifetime as:

P($80,000) = .2,   P($100,000) = .3,   P($120,000) = .1, and P($140,000) = .4

Draw this up as a payoff table with decision alternatives, states of nature and payoffs.

Should the developer sell the app? (Show your supporting work.)

Considering the closeness of the decision, the developer is interested in obtaining a better forecast of the app’s profitability, but that would cost money. As an upper bound on what it might be worth to investigate further, what is the value of perfect information in this case?

Reference no: EM131756498

Questions Cloud

Evaluate publicly available tools that provide data : Identify and evaluate publicly available tools that provide data and assist in formulating the basic shapes of demand and supply curves.
Etchical considerations in making subjective valuations : What are the etchical considerations in making subjective valuations of these complex financial instruments
Effects of the alternative actions on the components : On October 31, the stockholders' equity section of Heins Company consists of common stock $360,000 and retained earnings $902,000.
What are cost classifications for manufacturing companies : What are the cost classifications for manufacturing companies. What are cost classifications for preparing financial statements
Obtaining better forecast of the app profitability : Considering the closeness of the decision, the developer is interested in obtaining a better forecast of the app’s profitability,
Managing the us money supply : Explain the objectives of the Federal Reserve in managing the U.S. money supply, and describe its tools for adjusting the money supply to meet them.
Calculate the net present value of this machine : The required rate of return on this investment is 15%. Calculate the Net Present Value of this machine
Calculate the unit cost of the 16,000 units purchased : Calculate the unit cost of the 16,000 units purchased on June 26. Enter your answer with two places after the decimal point
How you developed your codes including any evolution : A description of your thinking or working process, explaining how you developed your codes, including any evolution of your coding system.

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd