MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing or (b) having the value analysis team complete a study If Ed Lusk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 80,000 units at $500 each, with a probability of 0.39 and a 0.61 probability of 60,000 at $500. If, however, he uses the value analysis team (option b), the firm expects sales of 90,000 units at $760, with a probability of 0.68 and a 0.32 probability of 70,000 units at $760. Value engineering, at a cost of $115,000, is only used in option b. Which option has the highest expected monetary value EMV)? The EMV for option a is $1 | and the EMV for option b is $1 I. Therefore, option | ?| has the highest expected monetary value. (Enter your responses as integers.)
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