Question

A company is considering making a new product. They estimate the probability that the new product will be successful is 0.75. If it is successful it would generate $240,000 in profit. The cost to develop the product is $196,000. Use the revenue (profit – cost) and expected value to decide whether the company should make this new product.

Answer 1

what are your thoughts for a solution?

Answer 2

I am not really sure how to do it~

Answer 3

you take the probability of success (and the revenue generated by it) and the probability of failure (and the cost associated with trying it) and get an expected value

aP(a) + bP(b)

Answer 4

Okay

Answer 5

spose you have a 1/4 chance of winning 3 dollars, and all you have to do is pay 1 dollar

your expected winning is just:

3(1/4) - 1(3/4) = 0, you expect to gain 0 dollars.

Answer 6

what do you get from your problem?

Answer 7

0.27(150,000) + 0.73(–35,000) = E(X) ?

Answer 8

or is it this 0.27(115,000) + 0.73(–35,000) = E(X)? I think this more makes

Answer 9

cost is a negative since we lose money; success is .75 so failure is .25

.75(revenue) - .25(cost)

.75(240000-196000) - .25(196000)

.75(44) - .25(196)

Answer 10

0.27(150,000) + 0.73(–35,000) = E(X)
150,000 – 0.73(35,000) = E(X)
0.27(150,000 – 35,000) = E(X)
0.27(115,000) + 0.73(–35,000) = E(X)
So would it be the last one?

Answer 11

anyone there I really need help

Answer 12

Also I have this one too
Two students created a game of dice. They determined that each roll would add the value of the die if it was an odd number. If the roll was even, it would subtract the value of the die. (For example, a roll of 2 would subtract two points, but a roll of 3 would add three points.) What is the expected value for this game?
–3
–0.5
0
0.5
I believe the answer is -0.5 but don't know

Answer 13

@amistre64

Answer 14

@brian16

Answer 15

your options on your first do not seem to correspond to the information given

Answer 16

each die face has a 1/6 probability assuming its a 6faced die

-1(1/6) -3(1/6) -5(1/6) +2(1/6) +4(1/6) +6(1/6)

would give us the expected score of the game if the die is rolled once

Answer 17

well, i got my odds and evens mixed up ....

Answer 18

and once again, your options do not correspond to the information ....

Answer 19

okay so would it be 0.27(150,000) + 0.73(–35,000) = E(X)

Answer 20

lets see if i remember how to add

10 and 12 ... 2/6 = 1/3

Answer 21

.75 and .25 are not .73 and .27

your information does not correspond to your options. either fix the question, or tell a teacher that the question is broken.

Answer 22

Okay thanks

Answer 23

these are the other things i would think
150,000 – 0.73(35,000) = E(X)
0.27(150,000 – 35,000) = E(X)

Answer 24

which one do you think?

Answer 25

I really need HELP!!!

Answer 26

AS u read carefully it says it can make 240 000 profit and 196 000 loss otherwise so i would think: 0.75*240-0.25*196

Answer 27

thank you so much!!!!!

Answer 28

I GOT IT RIGHT YOUR AMAZING!!!