You Are Considering Making a "Hillary" Action Figure to Capitalize

question 25

Multiple Choice

You are considering making a "Hillary" action figure to capitalize on popular political fever. Production will cost $5 million. If political fever strikes, you will sell action figures worth $20 million (in present value [PV]) . If voters do not catch the political fever, you will only sell action figures worth $2 million (in PV) as only loyal Democrats will buy. Each possibility has a 50 percent chance. However, before production begins, you can conduct a marketing survey to determine which scenario will happen. The survey costs $1 million. Is it worth conducting the survey? Why?

• A)Do not conduct the survey as the NPV without a survey = +$6 million.
• B)Conduct the survey as the NPV with a survey = $6.5 million.
• C)Do not conduct the survey as the NPV with a survey = $5 million.
• D)Do not conduct the survey as the NPV with a survey = $4 million.

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Definitions:

Aspiration Lesion

A neurosurgical procedure where targeted brain tissue is removed or destroyed using suction, often employed in research to study brain function by observing behavior changes post-lesion.

Transcranial Magnetic Stimulation

A noninvasive procedure that uses magnetic fields to stimulate nerve cells in the brain to improve symptoms of depression.

Brain Region

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Intracellular Recording

A technique used to measure the voltage or current within a single cell through the use of a fine electrode.