Answer:
Project B is preferable solely from the standpoint of expected monetary return.
Step-by-step explanation:
Calculations of Expected Returns:
Project A:
Net Profits Probability Expected Returns:
GHȼ 20,000.00 0.2 GHȼ 4,000
GHȼ 30,000.00 0.4 GHȼ 12,000
GHȼ 50,000.00 0.4 GHȼ 20,000
Total Expected Returns GHȼ 36,000
Project B:
Net Profits Probability Expected Returns:
GHȼ 100,000 0.5 GHȼ 50,000
GHȼ 0.00 0.5 GHȼ 0.00
Total Expected Returns GHȼ 50,000
Expected Returns are the returns or income which have been weighed with their probabilities of occurrence. It is used to determine the best outcome given events that have different probabilities of occurring. It is an important measure of returns which helps in deciding the best investment option to pursue.
