Question

{lease help :) A contractor is considering a sale that promises a profit of $20,000 with a probability of .7 or a loss due to bad weather, strikes and such of $3000 with a probability of .3, what is the expected profit?

Answer 1

Expected value = (20,000 x 0.7) - (3,000 x 0.3)

14,000 - 900

13100