A manufacturer plans on building a better mousetrap. There is a 60% chance the mouse trap will produce a profit of $200,000 for

Question

3 years ago

13

A manufacturer plans on building a better mousetrap. There is a 60% chance the mouse trap will produce a profit of $200,000 for

the company, a 20% chance of a $100,000 profit, and a 20% chance the company will lose $200,000.
Based on this information, should the company build the mousetrap?

A) The expected value is $70,000, so the company should build the mousetrap.

B) The expected value is $85,000, so the company should build the mousetrap.

C) The expected value is $100,000, so the company should build the mousetrap.

D) The expected value is -$70,000, so the company should not build the mousetrap.

Mathematics

1 answer:

Vlada [557] · Answer 1 · 2022-03-06T04:01:09+03:00

Vlada [557]3 years ago

3 0

The answer is
<span>C) The expected value is $100,000, so the company should build the mousetrap. </span>