Your company is considering

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Your company is considering two products for a new market. The probability distribution for the demand for the two products is presented in the table below. Q(A) and Q(B) are the possible quantities of each product that could be sold. P(A) and P(B) are the probabilities of selling the corresponding quantities.

Q(A)

P(A)

Q(B)

P(B)

10000

0.15

10000

0.25

30000

0.20

30000

0.30

50000

0.40

50000

0.35

60000

0.25

60000

0.15

You have the following additional information: The projected selling price for DESIGN “A” is $60. The fixed cost of its production is$75,000. Its variable cost is $35 a unit. The selling price for DESIGN “B” is $80. Its fixed cost of production is $110,000. Variable cost of production is $48 a unit.

Which project is expected to be more profitable?