Probability of high demand, NPV
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1. Whyth Motors has decided to run a marketing test to determine the demand for its LEV. It figures that if the test results are positive, there is an 80% chance the demand will be high and the if the test results are negative, there is a 10% chance the demand will be high. If the chances of a positive test result for Whyth are 70%, what is the probability of high demand?
2. If high demand is worth $30 million (NPV) and low demand worth $-10 million, how much is the project worth? If the test results are negative, the project will not be continued, causing a loss of $1 million.
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The expert calculates the probability of high demand and NPV.
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1) Whyth Motors has decided to run a marketing test to determine the demand for its LEV. It figures that if the test results are positive, there is an 80% chance the demand will be high and the if the test results are negative, there is a 10% chance the demand will be high. If the chances of a positive test result for Whyth are 70%, what is the probability of high demand?
Probability of ...
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