An oil-drilling company knows that it costs $25,000 to sink a test well. If oil is hit, the income for the drilling company will be $835,000. Ifonly natural gas is hit, the income will be $235,000. If nothing is hit, there will be no income. If the probability of hitting oil is 1/40 and if theprobability of hitting gas is 1/20, what is the expectation for the drilling company?$ 6875Should the company sink the test well?YesO No

From the given information, The probability of hitting the oil is 140 and the income for the oil hit…

Answered: An oil-drilling company knows that it…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

See similar textbooks

Similar questions

A game has an expected value to you of $400. It costs $400 to play, but if you win you receive $100,000 (including your $400 bet), for a net gain of $99,600. What is the probability of winning?
John and Larry are fundraisers for UNO. A wealthy benefactor says that he will match whatever John raises in the month of June – so if John raises 10,000 the benefactor will contribute an additional 10,000; if John raises 15,000, the benefactor will contribute an additional 15,000, etc. If John’s average monthly fundraising figure (expected value) is $25,000, and Larry’s is $30,000, what is the expected value for how much money UNO will raise in June?Explicitly state any properties of expectation you use to justify your conclusion.
Solve the question please
Suppose that you and a friend are playing cards and you decide to make a friendly wager. The bet is that you will draw two cards without replacement from a standard deck. If both cards are clubs, your friend will pay you $⁢41 . Otherwise, you have to pay your friend $⁢5 . Step 1 of 2 : What is the expected value of your bet? Round your answer to two decimal places. Losses must be expressed as negative values.
Suppose that you and a friend are playing cards and you decide to make a friendly wager. The bet is that you will draw two cards without replacement from a standard deck. If both cards are spades, your friend will pay you $⁢7. Otherwise, you have to pay your friend $2. Step 1 of 2 : What is the expected value of your bet? Round your answer to two decimal places. Losses must be expressed as negative values.
Charlie buys a one-year term home insurance policy for $p, that will pay $200,000 in the event of a major catastrophe and $35,000 in the event of a minor catastrophe. Charlie's home has a 0.2% chance of a major catastrophe and a 0.7% of a minor catastrophe during the one year term. What did the insurance company charge Charlie for this policy if the company expected to break even?
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?
You purchase a brand new car for $15,000 and insure it. The policy pays 78% of the car's value if there is an issue with the engine or 30% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.009, and the probability there is an issue with the speaker system is 0.02. The premium for the policy is p. Let X be the insurance company's net gain from this policy. (a) Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. P(X) (b) Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent
A lottery offers one $2000 prize, one $900 prize and five $200 prizes.One thousand tickets are sold at $5 each. Find the expectation if a person buys oneticket.
You flip two fair coins. If both coins land heads you win $2. Otherwise you lose $1. What is the expectation of this game? Round your answer to the nearest cent.
You have inherited a lottery ticket that may be a $5,000 winner. You have a 35% chance of winning the $5,000 and a 65% chance of winning $0. You have an opportunity to sell the lottery ticket for $1,500. What is your expected return and what should you do if are risk neutral?
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 year

SEE MORE QUESTIONS

Recommended textbooks for you

Advanced Engineering Mathematics

Advanced Math

ISBN:

9780470458365

Author:

Erwin Kreyszig

Publisher:

Wiley, John & Sons, Incorporated

Numerical Methods for Engineers

Advanced Math

ISBN:

9780073397924

Author:

Steven C. Chapra Dr., Raymond P. Canale

Publisher:

McGraw-Hill Education

Introductory Mathematics for Engineering Applicat…

Advanced Math

ISBN:

9781118141809

Author:

Nathan Klingbeil

Publisher:

WILEY

Advanced Engineering Mathematics

Advanced Math

ISBN:

9780470458365

Author:

Erwin Kreyszig

Publisher:

Wiley, John & Sons, Incorporated

Numerical Methods for Engineers

Advanced Math

ISBN:

9780073397924

Author:

Steven C. Chapra Dr., Raymond P. Canale

Publisher:

McGraw-Hill Education

Introductory Mathematics for Engineering Applicat…

Advanced Math

ISBN:

9781118141809

Author:

Nathan Klingbeil

Publisher:

WILEY

Mathematics For Machine Technology

Advanced Math

ISBN:

9781337798310

Author:

Peterson, John.

Publisher:

Cengage Learning,

Basic Technical Mathematics

Advanced Math

ISBN:

9780134437705

Author:

Washington

Publisher:

PEARSON

Topology

Advanced Math

ISBN:

9780134689517

Author:

Munkres, James R.

Publisher:

Pearson,

SEE MORE TEXTBOOKS