A new product has the following profit projections and associated probabilitie

A new product has the following profit projections and associated probabilities: Profit Probability
$150000 .10
$100000 .25
$ 50000 .20
0 .15
-$50000 .20
-$100000 .10 a. Use the expected value approach to decide whether to market the new product.
b. Because of the high dollar values involved especially the possibility of a $100000 loss the marketing vice president has expressed some concern about the
use of the expected value approach. As a consequence if a utility analysis is performed what is the appropriate lottery?
c. Assume that the following indifference probabilities are assigned. Do the utilities reflect the behavior of a risk taker or a risk avoider?
Profit Indifference Probability
$100000 .95
$ 50000 .70
0 .50
-$50000 .25
d. Use expected utility to make a recommended decision.
e. Should decision maker feel comfortable with the final decision recommended by the analysis?