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A company are looking to upgrade the robotics software in their manufacturing plant. The price of the software has been decreasing over the past year.
The current price of the software is £15,000 but if the company wait 6-months there is a 70% change the price will fall to £11,000. If the company buy the
software now it will cost £15,000 but they will save £3,000 in operating costs over the 6-month period by implementing the software upgrade.
The company seek to minimise their expected costs and must decide whether or not to buy the software upgrade now or in 6-months time. The best
decision has an expected cost of (to the nearest £1)
None of the other answers
£12,000
£11,000
£12,200
£15,000
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