Determine whether the company should bid for the rights

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Reference no: EM131077619

CABLE TELEVISION The management of MultiVision, a cable TV company, intends to submit a bid for the cable television rights in one of two cities, A or B. If the company obtains the rights to city A, the probability of which is .2, the estimated profit over the next 10 yr is $10 million; if the company obtains the rights to city B, the probability of which is .3, the estimated profit over the next 10 yr is $7 million. The cost of submitting a bid for rights in city A is $250,000 and that in city B is $200,000. By comparing the expected profits for each venture, determine whether the company should bid for the rights in city A or city B.

Reference no: EM131077619

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