Question

A citrus grower will make a prot of $100000 this year if the winter is mild. There is a 25%
chance that the temperature will drop, destroying 40% of the crop and reducing prot to
$60000. The grower can protect the fruit by spending $5000. Find the expected value of the
prot if the grower does not protect the fruit, and use this to determine which is the better
choice.