A Retailer Is Considering Building a Large Store

question 52

Multiple Choice

A retailer is considering building a large store.If the local economy experiences expansion,the firm expects the store to earn a $2,000,000 profit next year.If the local economy experiences a contraction,the firm expects the store to lose $400,000 next year.Analysts estimate a 20% chance for the local economy to experience an expansion next year (hence an 80% chance for contraction) .What is the expected monetary value (EMV) of building the large store?

• A)$1,600,000
• B)$720,000
• C)$2,000,000
• D)$80,000
• E)$1,520,000

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Definitions:

Organic Product

A compound or substance resulting from the chemical reactions involving organic molecules.

Enol

An organic compound containing a hydroxyl group directly connected to a carbon-carbon double bond, often in equilibrium with its keto form.

2,2,4-Trimethyl-3-pentanone

A chemical compound with the molecular formula C8H16O, serving as a ketone with its carbonyl group located on the third carbon atom.

Enolizable Ketone

A ketone capable of tautomerizing to an enol, which is a compound with a double bond and an alcohol group.