Austin Electronics expects sales next year to be at $900,000 if the economy is strong, $650,000 if the economy is steady, and $375,000 if the economy is weak. The firm believes there is a 15 percent probability the economy will be strong, a 60 percent probability of a steady economy, and a 25 percent probability of a weak economy. What is the expected level of sales for next year?

To calculate the expected level of sales for next year, we need to multiply each possible sales value by the corresponding probability and then sum up the results.

Let's break it down step by step:

1. Multiply the sales level for a strong economy ($900,000) by the probability of a strong economy (0.15).
Strong economy sales = $900,000 * 0.15 = $135,000.

2. Multiply the sales level for a steady economy ($650,000) by the probability of a steady economy (0.60).
Steady economy sales = $650,000 * 0.60 = $390,000.

3. Multiply the sales level for a weak economy ($375,000) by the probability of a weak economy (0.25).
Weak economy sales = $375,000 * 0.25 = $93,750.

4. Sum up the results from step 1, 2, and 3.
Expected level of sales = Strong economy sales + Steady economy sales + Weak economy sales
= $135,000 + $390,000 + $93,750
= $618,750.

Therefore, the expected level of sales for next year is $618,750.

To find the expected level of sales for next year, we multiply each possible sales amount by their respective probabilities and sum up the results.

Let's calculate it step-by-step:

1. Calculate the expected sales for a strong economy:
Expected sales for a strong economy = $900,000 * 0.15 = $135,000

2. Calculate the expected sales for a steady economy:
Expected sales for a steady economy = $650,000 * 0.60 = $390,000

3. Calculate the expected sales for a weak economy:
Expected sales for a weak economy = $375,000 * 0.25 = $93,750

4. Sum up the expected sales amounts:
Expected sales = $135,000 + $390,000 + $93,750 = $618,750

Therefore, the expected level of sales for next year is $618,750.