The Walker Construction Company has just received a building contract. Walker estimates there is a 60% chance of making a $500,000 profit, a 10% chance of breaking even, and 30% chance of losing $200,000, depending upon weather conditions and other factors. What is the expected value of the company's contract?

The Walker Construction Company has just received a building contract. Walker estimates there is a 60% chance of making a $500,000 profit, a 10% chance of breaking even, and 30% chance of losing $200,000, depending upon weather conditions and other factors. What is the expected value of the company's contract?

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Similar questions

Q17. A single share of a stock was purchased prior to the company's release of its quarterly report. There is a 58% chance that the company will meet the quarterly sales expectations for its new product two weeks from now, and the value of the stock will go to $440. Otherwise, the company will not meet the quarterly sales expectations, and the value of the stock will go down to $100. What is the expected value of the stock two weeks from now? (Round to the nearest dollar. Do not enter $ sign.)
The starting quarterback for your high school team injured his shoulder at practice. The doctor says there is a 70% chance that he will play in the next game. If he plays in the game, the team will likely score 35 points. If the back up quarterback plays in the game, then the team will likely score 24 points. Find the expected value. Show your work
United Healthcare is setting plan prices for cancer survivors in the upcoming plan year. It is estimated that 26% of survivors of a particular cancer will redevelop cancer in the next year, and that the treatment will cost about $350,000. United would like to maintain an expected value of $550 per plan; how much do they need to charge each person in order to attain this expected value?
A certain model phone costs $599. The probability of the phone breaking over the course of a year is .07. What is the maximum amount you could pay for phone replacement insurance and still have a non-negative expected value on the policy? In other words, for what price or below would it be worth it to get the insurance?
Oxnard petri Ltd is buying hurricane insurance for it's off-coast drilling platform. During the next five years, the probability of total loss of only the above-water superstructure ($250 million) is .25, the probability of total loss of the facility ($950 million) is.25, and the probability of no loss is.50. Find the expected loss.( Input the amount as a positive value.) Expected Loss is what?
Counting: Permutations Arrangements of n objects; order matters 1. Choose 3 different colors of cubes. Display these three colors in as many different ways as blue.) You cannot repeat colors. you can. (For example, a row of red, green, and blue is different from a row of green, red, and a. How many different ways did you find to order the three cubes? Once you have displayed all orders with your cubes, list all ways here. Then try to show your solution with a tree. b. For any given row, how many choices do you have for your first color? Once you have chosen that first color, how many different choices do you have for your second color? Your third color?
A local youth group is selling raffle tickets to raise money for a trip. A raffle ticket costs $5. There are 2 first place winning tickets with a prize worth of $55, there are 7 second place winning tickets with a prize work of $38, and there are 8 third prize winning tickets with a prize worth of $20 out of the 230 tickets sold. What is the expected value to the purchaser of one raffle ticket? Round your answers to the nearest cent.
In Wyoming there are about 300,000 registered voters, of whom 30,000 are Democrats. A survey organization is about to take a simple random sample of 900 registered voters. (Answer below in percent to the nearest whole percent; do not enter the % sign.) a. The expected value for the percentage of Democrats in the sample is %. The SE for the percentage of Democrats in the sample is b. The percentage of Democrats in the sample is likely to be around %, give or take % or so. %. c. Find the chance that between 9% and 11% of the registered voters in the sample are Democrats. (Do not round the SE in calculating this probability). Answer: %
An insurance policy on an electrical device pays a benefit of $2400 if the device fails during the first year. The amount of the benefit decreases by $800 each successive year until it reaches 0 . If the device has not failed by the beginning of any given year, the probability of failure during that year is 0.29.Find the expected benefit under this policy.
Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 95.5%. If BIC charges a premium of 9,900 silver coins and would pay a death benefit of 49,518 silver coins if the insured were to die, what is the expected value of this insurance policy to BIC? Round to the nearest silver coin as needed. If the expected value is a loss to BIC, enter your answer as a negative number.