How to solve XAT 2014 Question 39?

This question can be solved by applying the core concept explained in the solution above, followed by step-by-step calculation and elimination of options.

Which concept is tested in this question?

This question tests fundamental concepts commonly asked in XAT exams.

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XAT 2014 Question 39

This is a detailed step-by-step solution for XAT 2014 Question 39. Understand the concept, common mistakes, and expert tips to solve similar questions in XAT exam.

XAT

After testing the market the total cost incurred= 50+10=60Cr.
The product will be a success 30% of times after the marketing test is unfavourable. So the probability of success is 0.3.
The probability of failure= 0.7.
The expected return is = 20 × 0.7+100$$\times\$$0.3 = 44Cr.
Total profit= 44-60 Cr=-16Cr.

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