Answer:
The president should release the new laptop now
Step-by-step explanation:
The profit if the new laptop is released now and no competitive device enters the market = $120,409.00
The profit if the new laptop is released now and a competitive device enters the market = $29,698
The profit if the new laptop is released in a years time and no competitive device enters the market = $84,742.00
The loss if the new laptop is released in a years time and a competitive device enters the market = $59,396.00
The chance that a competitive device will enter the market = 22%
∴ The chance that a competitive device will not enter the market = 1 - 22% = 78%
The expected increase in profit the company can make, compared to next year, if the new laptop is released and no competitive device enters the market = ($120,409.00 - $84,742.00) × 78% = $27,820.26
The expected increase in profit the company can make, compared to next year, if the new laptop is released and a competitive device enters the market = ($29,698.00 - $59,396.00)×0.22 = ($6,533.56) loss
Therefore, to maximize the expected profit over the next year, the president should release the new laptop now to make an expected profit of $27,820.26 over the next year.
