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Refer to the Following:
a Firm Is Considering Two Projects

Question 3

Multiple Choice

Refer to the following:
A firm is considering two projects, A and B, with the following probability distributions for profit.
 Profit  ($1,000s)   Praject A Probability (%)  Project B Prabability (%)  $2010104015155050258015401001010\begin{array} { c c c } \begin{array} { c } \text { Profit } \\\text { (\$1,000s) }\end{array} & \begin{array} { c } \text { Praject } A \\\text { Probability } ( \% ) \end{array} & \begin{array} { c } \text { Project B} \\\text { Prabability (\%) }\end{array} \\\hline \$ 20 & 10 & 10 \\40 & 15 & 15 \\{ 5 0 } & 50 & { 2 5 } \\{ 8 0 } & 15 & 40 \\100 & 10 & 10\end{array}
-The expected value of project A (in $1,000s) is


A) $60
B) $65
C) $70
D) $75
E) $80

Correct Answer:

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