We plan to build a large plant that will cost $190,000 to build. The expected payoff per year with reduced prices and low demand is $30,000. It is believed, with a large plant and high demand we can expect payoff of either $40,000 or $56,000. Revenue per customer is $6.00. The probability of low demand is 0.6 and the probability of high demand is 0.4. What is the expected payoff of building a large plant?

We plan to build a large plant that will cost $190,000 to build. The expected payoff per year with reduced prices and low demand is $30,000. It is believed, with a large plant and high demand we can expect payoff of either $40,000 or $56,000. Revenue per customer is $6.00. The probability of low demand is 0.6 and the probability of high demand is 0.4. What is the expected payoff of building a large plant?

College Algebra

1st Edition

ISBN:9781938168383

Author:Jay Abramson

Publisher:Jay Abramson

Chapter9: Sequences, Probability And Counting Theory

Section9.7: Probability

Problem 60SE: Use this data for the exercises that follow: In 2013, there were roughly 317 million citizens in the...

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