Assignment: You're the manager of global opportunities for a U.S. manufacturer, who is considering expanding sales into Europe. Your market research has identified three potential market opportunities: England, France and Germany.
If you enter the English market, you have a .5 chance of big success (selling 100,000 units at a per-unit profit of $8), a .3 chance of moderate success (selling 60,000 units at a per-unit profit of $6), and a .2 chance of failure (selling nothing).
If you enter the French market, you have a .4 chance of big success (selling 120,000 units at a per-unit profit of $9), a .4 chance of moderate success (selling 50,000 units at a per-unit profit of $6), and a .2 chance of failure (selling nothing).
If you enter the German market, you have a .2 chance of huge success (selling 150,000 units at a per-unit of $10), a .5 chance of moderate success (selling 70,000 units at a per-unit profit of $6), and a .3 chance of failure (selling nothing).
a) If you can enter only market, and the cost of entering the market (regardless of which market you select) is $250,000, should you enter one of the European markets?
b) If so, which one?
c) If you enter, what is your expected profit?