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irinina [24]
2 years ago
8

Based on past experience, a building contractor sets the

Mathematics
1 answer:
Leni [432]2 years ago
6 0

Based on the cost of the contract and the probability to win it, the total expected value of the contract proposal is -$2500.

<h3>How to calculate the expected value of a contract proposal?</h3>

The general formula to calculate the expected value is:

  • Expected value: possibility of winnind the contract x the amount when winning - possibility of loing the contract x possible loss

  • Possibility of winning the contract= 0.10
  • Possibility of losing the contract = 0.90
  • Gain: $65000
  • Loss: $10000

<h3>What is the expected value of the contract?</h3>
  • Expected value: 0.10 x 65000 - 0.90 x 10000
  • Expected value: 6500 - 9000
  • Expected value: -$2500

Learn more about contract in: brainly.com/question/2669219

#SPJ1

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