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 buil

Question

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 buil

dumgai · Answer

C