Answer:
Option b has the highest expected monetary value (EMV)
Explanation:
For Option a:
At probability 0.65: At probability 0.35
Units=110,000 Units=65,000
Amount=$580 each Amount=$580
EMV/Total Sales=0.65(110,000*580)+0.35(65,000*580)
EMV/Total Sales=$54,665,000
For Option b:
At probability 0.62: At probability 0.38
Units=85,000 Units=60,000
Amount=$740 each Amount=$740
EMV/Total Sales=0.62(85,000*740)+0.38(60,000*740)
EMV/Total Sales=$55,870,000
So Option B has the highest expected monetary value (EMV).
