What is the expected monetary value for manar

Assignment Help Business Economics

Reference no: EM134027761

Question

Brampton Metaverse Network must decide on which one of two new digital games to create: MANAR or PENTAGO. The costs of producing and operating the two games are similar and the average monthly subscription for either game could be low (23,000 subscribers), medium (81,000 subscribers), or high (179,000 subscribers).

If the company chooses to create MANAR, they will charge $40 per account for monthly subscription, and the probabilities of low and high subscriptions are 0.15 and 0.68 respectively.

For PENTAGO, there is a 54% chance that a competitive game will appear on the market. The probability of low subscription is 0.33 if no competitive game appears and 0.6 if a competitive game appears. The probability of medium subscription is 0.24 whether or not competition appears. The company will charge $46/month per account for subscription to PENTAGO if no competitive game appears but will only charge $35/month if competition appears.

Construct a decision tree for the problem, where payoffs are total monthly subscription in dollars.
For example, if MANAR is created and subscription is low, then subscription dollars will be $40*23000 = $920,000.

Report answers accurate to the nearest dollar.

1. What is the expected monetary value for MANAR?

2. What is the expected monetary value for PENTAGO if there is no competition?

$ This is not a decimal or integer value.

3. What is the expected monetary value for PENTAGO if competition appears?

4. What is the expected monetary value for PENTAGO?

5. What is the expected monetary value of the optimal decision?

Reference no: EM134027761

Questions Cloud

Opportunities for children to participate in science : Providing opportunities for children to participate in science, mathematics, engineering and technology and opportunities to engage in experiences

Build sense of belonging-positive self-image : Build a sense of belonging, positive self-image and identity through play and by developing relationships with and knowledge of children and their families

Perfect competition market structure : Name an industry that you feel is closest to perfect competition market structure.

About the principles of socialism : Now that you have learned about the principles of socialism, write thread that compares individual rights with collectivism.

What is the expected monetary value for manar : What is the expected monetary value for MANAR? What is the expected monetary value for PENTAGO? What is the expected monetary value of the optimal decision?

Business analyst in small boutique consulting firm : You work as a business analyst in a small boutique consulting firm. what policies could be introduced to reduce the gap.

Percentage change in quantity demanded divided : The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in _________ .

Compare the nutritional information : Compare and contrast the nutritional information. Provide an explanation of why the information is the same/different.

Compute the Benefit-Cost Ratio : Suppose the interest rate is 5%, compute the net present value (NPV) of the investment with this discount rate. Compute the Benefit-Cost Ratio.

User Account

All Pages