Fiam Industries projects the following revenues from their competitor's possible strategies choices:
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Competitor's Strategy
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Probability of Competitor's Strategy
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Fiam's Revenue ($millions)
|
|
Expand Production
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0.19
|
1,187.1
|
|
Reduce Production
|
0.2
|
3,005.6
|
Fiam projects revenue of $2,428 million if their competitor's production is unchanged.
Further, Fiam Industries faces altered total cost due to potential government regulations. They believe that new regulations will be imposed with a probability of 0.1. These new regulations will result in a total cost of $1,532.4 million.If the regulations remain unchanged, then Fiam projects a total cost of $981.1 million.
Calculate Fiam's expected profit. Round your answer to one decimal.