Sentosa Company Is Considering Launching a New Product Which It

Multiple Choice

Sentosa Company is considering launching a new product which it believes has a 70% probability of success. The company is, however, considering undertaking an advertising campaign costing £60,000, which would increase the probability of success to 95%. If successful the product would generate income of £240,000 otherwise £84,000 would be received.
What is the maximum amount that the company should be prepared to pay for advertising?

A) £34,800
B) £21,000
C) £39,000
D) £60, 000