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Transcendent Technologies is deciding between developing a complicated thought-activated software,or a simple voice-activated software.Since the thought-activated software is complicated,it only has a 30% chance of actually going through to a successful launch,but would generate revenues of $50million if launched.The voice-activated software is simple and hence has a 80% chance of being launched but only generates a revenue of $10million.The complicated technology costs 10million,whereas the simple technology costs 2million.
-​What is the expected revenue from developing the simplified software?


Definitions:

Nominal Variables

Variables measured in monetary terms without adjusting for changes in price levels or inflation.

Inflation Theory

is the set of various theories explaining the cause and effects of increasing prices or inflation in an economy.

Price Level

Reflects the average of current prices across the entire spectrum of goods and services produced in the economy, serving as a measure of inflation.

Value of Money

The purchasing power of money, which can vary over time due to inflation or changes in the economy.

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