Question

A contractor is considering whether he should take on a project that promises a profit of $8800 with a probability of 0.83 or a loss (due to bad weather, strikes, etc.) of $2900 with a probability of 0.17. What is the expected profit for the contractor

Answer 1

Answer: 6811

Explanation:

in this problem the values are 8800 and -2900 and the respective probabilities are 0.83 and 0.17

--

so the expected profit o# sum = (x*P(x))=8800*(0.83)+(-2900)*(0.17)=6811