Find the expected value of the random variable. Round to the nearest cent unless stated otherwise.
-A contractor is considering a sale that promises a profit of $27,000 with a probability of 0.7 or a loss (due to bad weather, strikes, and such)of $2000 with a probability of 0.3. What is the expected
Profit? Round the answer to the nearest dollar.
A)$18,300
B)$20,300
C)$25,000
D)$18,900

Question

Find the expected value of the random variable. Round to the nearest cent unless stated otherwise.
-A contractor is considering a sale that promises a profit of $27,000 with a probability of 0.7 or a loss (due to bad weather, strikes, and such)of $2000 with a probability of 0.3. What is the expected
Profit? Round the answer to the nearest dollar. 
A)$18,300
B)$20,300
C)$25,000
D)$18,900

Quizplus · Accepted Answer

The expected profit is calculated as: (0.7 * $27,000) + (0.3 * -$2,000) = $18,900.

Find the Expected Value of the Random Variable