Assume That One of Two Possible Outcomes Will Follow a Decision

question 49

Multiple Choice

Assume that one of two possible outcomes will follow a decision. One outcome yields a $75 payoff and has a probability of 0.3; the other outcome has a $125 payoff and has a probability of 0.7. In this case the expected value is:

• A) $85.
• B) $60.
• C) $110.
• D) $35.

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Definitions:

Business Plan

A detailed document that outlines the objectives, strategies, marketing, and financial forecasts of a business.

Financing

involves providing funds for business activities, making purchases, or investing.

Small Business Development Centres

Organizations that provide support and resources to small businesses to help them grow and succeed.

U.S. Small Business Administration

A government agency that provides support to entrepreneurs and small businesses through loans, grants, and resource guidance.