Keystone Generation,Inc.has a project that costs $900,000.It has a 50% chance of paying off $2,000,000 and a 50% chance of paying off $0.What is the expected payoff and the expected profit or loss from the new project?
A) The expected payoff is $1,000,000,and the expected loss is $10,000.
B) The expected payoff is $100,000,and the expected profit is $10,000.
C) The expected payoff is $100,000,and the expected loss is $100,000.
D) The expected payoff is $1,000,000,and the expected profit is $100,000.
Correct Answer:
Verified
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