A contractor is considering a sale that promises a profit of $23,0000 with a probability of 0.7 or a loss (due to bad weather, strikes, and such) of $9000 with a probability of 0.3. What is the expected profit?
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- A company estimates that 0.8% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $150. If they offer a 2 year extended warranty for $22, what is the company's expected value of each warranty sold?You have inherited a lottery ticket which might be a $10,000 winner. You have a 0.25 chance of winning the $10,000 and a 0.75 chance of winning $0. You have an opportunity to sell the lottery ticket for $2,500 - What is your expected return and what should you do if are risk averse?1. An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.05 of a $15,000loss, probability 0.15 of a $20,000 loss, probability 0.35 of a$35,000 profit, and probability 0.45 of breaking even (a profit of $0). What is the expected value of the profit? Select one: A. $16,000 B. $0 C. $19,750 D. $8500 note:-please send me answer in typed form strictly prohibited hand written solution
- If a player rolls 2 dice and gets a sum of 3 or 11, he wins $10. If he gets a sum of 7, he pays $5. What is his expected value?A company estimates that 0.7% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $50.If they offer a 2 year extended warranty for $4, what is the company's expected value of each warranty sold?Kramer wants to open a fruit stand. He figures his business can be really successful, moderately successful, barely successful, a failure, or a complete failure. Below is a table of all the possible outcomes, the estimated probability that each outcome will occur, and the profit Kramer will make for each out. What is the expected profit, in thousands, for this business? (Round your answer to the nearest two decimal places. Do not include the dollar sign ($) in your answer.) Outcome Really successful Moderately successful Failure P() 0.1 2 0.2 Complete failure 0.3 Barely successful ³1 5 0.2 8 Quarterly Profit ($, thousands) 0.0 2 30 16 -5 -25
- If the famous insurance company, Lloyd’s of London, insures a $3 million Monet painting for $5000 per year. And, in each year, the painting has a .00021 chance of being stolen according to the Lloyd’s research team? From Lloyd’s perspective, find the expectation for insuring this painting for one yearA company estimates that 0.6% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $250. If they offer a 2 year extended warranty for $39, what is the company's expected value of each warranty sold?A company estimates that 0.6% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $400. If they offer a 2 year extended warranty for $42, what is the company's expected value of each warranty sold?