OOO$4,085$3,300$3,267$3,835 Buchanan Corporation forecasts the following payoffs from a project.OutcomeProbability of Outcome15%45%40%$ 1,000$ 3,300$ 5,500What is the expected value of the outcomes?Assumptionspessimisticmoderately successfuloptimistic

Expected value of outcomes will be multiplying the outcome with the probability of outcome.Expected…

Buchanan Corporation forecasts the following payoffs from a project. Probability of Outcome 15% 45% 40% Outcome $ 1,000 $ 3,300 $ 5,500 What is the expected value of the outcomes? Assumptions pessimistic moderately successful optimistic

Buchanan Corporation forecasts the following payoffs from a project. Probability of Outcome 15% 45% 40% Outcome $ 1,000 $ 3,300 $ 5,500 What is the expected value of the outcomes? Assumptions pessimistic moderately successful optimistic

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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Question

Buchanan Corporation forecasts the following payoffs from a project.
Outcome
Probability of Outcome
15%
45%
40%
$ 1,000
$ 3,300
$ 5,500
What is the expected value of the outcomes?
Assumptions
pessimistic
moderately successful
optimistic

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