Reference no: EM132730736

Problem 1: XYZ Software can develop either a simple or a complex product. The simple product has projected revenue of $1 million, costs of $200,000 and a launch rate of 50%. The complex product has projected revenue of $3 million, costs of $800,000 and a launch rate of 40%. Products that aren't launched incur full costs but capture no revenue. Based on this information, XYZ should develop

A. the simple product, which has an expected cost of $100,000 vs. $320,000 for the complex product.

B. either product, because their expected profits are equal.

C. the complex product, which has an expected profit of $400,000 vs. $300,000 for the simple product.

D. neither product, since their expected profits are both negative.