Question

A contractor is considering a sale that promises a profit of 26,000 with a probability of 0.7 or a loss (due to bad weather strikes, and such) of $8000 with a probability of 0.3. What is the expected profit?
A. $15,800
B. $23,000
C. 18,000

How do I solve this?

Answer 1

Answer:

A

Step-by-step explanation:

The expected profit would be the sum of all the possibility multiplied. It means,

"We need to multiply the profit by its possibility and add it with the product of the loss and its possibility."

This will be the expectation, or expected profit.

Let's do it:

Expected Profit = $(26,000)(0.7) + (-8000)(0.3) = 15,800$

The correct answer is A

Answer 2

Answer:

Step-by-step explanation: