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

question 14

Multiple Choice

You are considering making a "Hillary" action figure to capitalize on what you are sure will be a massive resurgence political fever. Production will cost $5 million. If political fever strikes, you will sell action figures worth $20 million (in present value (PV) ) . If the voters do not catch the political fever, you will only sell action figures worth $2 (in PV) million as only loyal democrats will buy. Each has a 50% chance of happening. Before beginning production, 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 E(NPV without survey) = +$6 million
• B) Conduct the survey as the E(NPV with survey) = $6.5 million
• C) Do not conduct the survey as the E(NPV with survey) = $5 million
• D) None of the above

---

Definitions:

Six-Panel Screen

A six-panel screen is a type of foldable screen, consisting of six connected panels, that is often used in interior design for partitioning spaces or as decorative art.

Animal Depicted

The representation of animals in art, which can symbolize various cultural, religious, or psychological themes.

Bull

Symbolically represents strength, fertility, and power across various cultures and can be a significant motif in art, mythology, and literature.

Folk Art Movement

A style of art that reflects cultural heritage, traditions, and the community life of ordinary people, typically produced by self-taught or minimally trained artists.