What is the potential profit

Reference no: EM13201139

You’re the manager of global opportunities for a U.S. manufacturer, who is considering expanding sales into Europe. Your market research has identified 3 potential market opportunities: England, France, and Germany. If you enter the English market, you have a 0.5 chance of big success selling 100,000 units at a per-unit profit of $8. a 0.3 chance of moderate success selling 60,000 units at a per-unit profit of $6, and a 0.2 chance of failure sell nothing. If you enter the French market, you have a 0.4 chance of big success selling 120,000 units at a per-unit profit of $9, a 0.4 chance of moderate success selling 50,000 units at a per-unit profit of $6 and a 0.2 chance of failure sell nothing. If you enter the German market, you have a 0.2 chance of huge success selling 150,000 units at a per-unit profit of $10, a 0.5 chance of moderate success selling 70,000 units at a per-unit profit of $6, and a 0.3 chance of failure selling nothing.

If you can enter only one market, and the cost of entering the market is $250,000, should you enter one of the European markets? If so, which one?

If you enter, what is your potential profit?

Reference no: EM13201139

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