4. Claire is considering investing in a new business. In the first year, there is a probability of 0.2 that the new business will lose $10,000, a probability of 0.4 that the new business will break even ($0 loss or gain), a probability of 0.3 that the new business will make $5,000 in profits, and a probability of 0.1 that the new business will make $8,000 in profits. a. Claire should invest in the company if she makes a profit. Should she invest? Explain using expected values. b. If Claire's initial investment is $1,200 and the expected value for the new business stays constant, how many years will it take for her to earn back her initial investment?

4. Claire is considering investing in a new business. In the first year, there is a probability of 0.2 that the new business will lose $10,000, a probability of 0.4 that the new business will break even ($0 loss or gain), a probability of 0.3 that the new business will make $5,000 in profits, and a probability of 0.1 that the new business will make $8,000 in profits. a. Claire should invest in the company if she makes a profit. Should she invest? Explain using expected values. b. If Claire's initial investment is $1,200 and the expected value for the new business stays constant, how many years will it take for her to earn back her initial investment?

Elementary Geometry For College Students, 7e

7th Edition

ISBN:9781337614085

Author:Alexander, Daniel C.; Koeberlein, Geralyn M.

Publisher:Alexander, Daniel C.; Koeberlein, Geralyn M.

ChapterP: Preliminary Concepts

SectionP.CT: Test

Problem 1CT

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