Business projection: An investor is considering an investment in a start-up company. She estimates that she has probability 0.39 of a $23,200 loss, probability 0.28 of a $14,100 profit, probability 0.19 of a $48,000 profit, and probability 0.14 of breaking even (a profit of $0). What is the expected value of the profit? Would you advise the investor to make the Investment?

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter9: Counting And Probability
Section9.2: Probability
Problem 48E: Quality Control To control the quality of their product, the Bright-Light Company inspects three...
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Business projection: An investor Is considering an investment in a start-up company. She estimates that she has probability
0.39 of a $23,200 loss, probability 0.28 of a $14,100 profit, probability 0.19 of a $48,000 profit, and probability 0.14 of breaking
even (a profit of $0). What is the expected value of the profit? Would you advise the Investor to make the Investment?
Transcribed Image Text:Business projection: An investor Is considering an investment in a start-up company. She estimates that she has probability 0.39 of a $23,200 loss, probability 0.28 of a $14,100 profit, probability 0.19 of a $48,000 profit, and probability 0.14 of breaking even (a profit of $0). What is the expected value of the profit? Would you advise the Investor to make the Investment?
The investor (Choose one)
make the investment.
should
should not
Transcribed Image Text:The investor (Choose one) make the investment. should should not
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