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Crusik Distribution Company

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The owner of the Crusik Distribution Company is evaluating the expected annual sales for a new
line of facial care products and estimates that there is a 50% chance that the product line
will be extremely successful, in which case it will generate sales next year of $5 million.
However, since the new product line has a unique appeal that will require substantial
advertising by its manufacturer to gain consumer acceptance, there is a 50% chance that
revenues for next year will be a modest $1 million.

What is the expected level of revenues for the new product line?

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