Asked by Len
Your company plans to invest a particular project. There is a 5% chance that you will lose $30, 000, a 40% chance that you will break even, and a 25% chance that you will make $55, 000. Based solely on this information, what should you do?
Answers
Answered by
bobpursley
expected value of investment:
.05*(-30,000)+.40*0+.25*55,000=
12,250
so the investment has a postitive outcome as of now. Notice all outcomes are not listed, only listed are 70 percent of the outcomes. Frankly, I would like more information.
.05*(-30,000)+.40*0+.25*55,000=
12,250
so the investment has a postitive outcome as of now. Notice all outcomes are not listed, only listed are 70 percent of the outcomes. Frankly, I would like more information.
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.