A company is bidding for three contracts which are awarded independently of each other. The board estimates its chances of winning Contract X as 55%, of winning Contract Y as 25% and of winning Contract Z as 20%. The profits from X, Y and Z are estimated to be P600,000, P700,000 and P850,000 respectively. The expected value to the company of the profits from all three contracts will be closest to:
A company is bidding for three contracts which are awarded independently of each other. The board estimates its chances of winning Contract X as 55%, of winning Contract Y as 25% and of winning Contract Z as 20%. The profits from X, Y and Z are estimated to be P600,000, P700,000 and P850,000 respectively. The expected value to the company of the profits from all three contracts will be closest to:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A company is bidding for three contracts which are awarded independently of each other. The board estimates its chances of winning Contract X as 55%, of winning Contract Y as 25% and of winning Contract Z as 20%. The profits from X, Y and Z are estimated to be P600,000, P700,000 and P850,000 respectively. The expected value to the company of the profits from all three contracts will be closest to:
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