Suppose LG decided to invest 45 billion won in developing and launching a new model of its smart bathroom scales, expecting that it will bring additional sales of 60 billion won. The company has alrea

Suppose LG decided to invest 45 billion won in developing and launching a new model of its smart bathroom scales, expecting that it will bring additional sales of 60 billion won. The company has already invested 38 billion won when the marketing department suddenly finds out that the introduction of a similar smart scales by Samsung will reduce LG’s expected additional sales to 30 billion won. The company’s management is trying to decide whether to continue investing in the new product or close the project.

Explain what decision LG should make and why.

 
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