Answer:
B. $725,000
Explanation:
The expected value for the contract will be :
10% ($725,000 + 12,000 + 12,000 ) + 30% ($725,000 + 12,000 ) + 25% ($725,000 ) + 20% ($725,000 - 12,000 ) + 15% ($725,000 - 12,000 - 12,000 )
= $ 74,900 + $221,100 +$181,250 + $142,600 + $105,150 = $725,000
Marlboro constructions expected value of the contract is 725,000 based on the given probability estimates of contract completion.
