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Jim Sellers is thinking about producing a new type of electric razor for men.
Given the data and information as follows:
· If the market were favorable, he would get a return of $100,000.
· If the market of the new type of razor were unfavorable, he would lose $60,000.
Jim is considering using a research company to gather additional information about the market for the razor. Here are the two choices:
· A survey with Bush Marketing Research. The cost is $5,000.
· A pilot study, which is more accurate than the survey, but is also more expensive. The cost is $20,000.
Jim was advised it would be a good idea to conduct either the survey or the pilot before making decision whether to produce the new razor. But Jim is not sure if the value of the survey or the pilot is worth the cost.
Jim estimates that:
· The probability of successful market without performing a survey or pilot study
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