?Tree Co is considering employing a sales manager. Market research has shown that a good?sales manager can increase profit by 30%, an average one by 20% and a poor one by 10%.?Experience has shown that the company has attracted a good sales manager 35% of the?time, an average one 45% of the time and a poor one 20% of the time. The company’s?normal profits are $180,000 per annum and the sales manager’s salary would be $40,000?per annum.?
Based on the expected value criterion, which of the following represents the correct?advice which Tree Co should be given??