Chapter 8, Problem 70RE

To determine

To calculate: The expected value of two plans considered by the company sales manager and state which plan should be chosen by the sales manager in reference to its expected value. Plan $A$ has net worth $\text{\$}10$ million with probability of success being 0.8, otherwise a loss of $\text{\$}2$ million with probability $0.2$. Plan $B$ has net worth $\text{\$}12$ million with probability of success being 0.7 , otherwise a loss of $\text{\$}2$ million with probability $0.3$.