What would be the expected monetary value for Avalia Corp using the probability method? $$\begin{array} { c c }
\text { Probability } & \text { Cash Inflows } \
0.20 & \$ 200,000 \
0.30 & \$ 160,000 \
0.15 & \$ 120,000 \
0.35 & \$ 50,000
\end{array}$$
A) $40,000
B) $188,000
C) $123,500
D) $60,000

Question

What would be the expected monetary value for Avalia Corp using the probability method? $$\begin{array} { c c } 
\text { Probability } & \text { Cash Inflows } \
0.20 & \$ 200,000 \
0.30 & \$ 160,000 \
0.15 & \$ 120,000 \
0.35 & \$ 50,000
\end{array}$$
A) $40,000
B) $188,000
C) $123,500
D) $60,000

Quizplus · Accepted Answer

The expected monetary value is calculated by multiplying each cash inflow by its probability and summing the results: (0.20 * $200,000) + (0.30 * $160,000) + (0.15 * $120,000) + (0.35 * $50,000) = $123,500.

What Would Be the Expected Monetary Value for Avalia Corp