Question

Please check my answer real quick?

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.

Should the company build the mousetrap?

A) expected value is $70,000, so the company should build the mousetrap.
>>>B) expected value is $85,000, so the company should build the mousetrap.
C) expected value is $100,000, so the company should build the mousetrap.
D) expected value is -$70,000, so the company should not

Answer 1

expected value = 0.60 * 200,000 + 0.20*100,000- 0.20*200,000

Answer 2

so they would gain 100,000?

Answer 3

100,000 is the expected value

Answer 4

thanks so much - can you help with one more?-(similar problem)

Answer 5

OK but please post the question seperately.