Annual savings due to an energy efficiency project have a most likely value of $30,000. The high estimate of $40,000 has a probability of 0.2, and the low estimate of $20,000 has a probability of 0.30. What is the expected value for the annual savings?

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter17: Making Decisions With Uncertainty
Section: Chapter Questions
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Annual savings due to an energy efficiency project have a most likely value of $30,000.
The high estimate of $40,000 has a probability of 0.2, and the low estimate of $20,000
has a probability of 0.30. What is the expected value for the annual savings?

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