Refer to the Following:
a Firm Is Considering Two Projects

question 8

Multiple Choice

Refer to the following:
A firm is considering two projects, A and B, with the following probability distributions for profit.
$$\begin{array} { c c c } \begin{array} { c } \text { Profit } \\\text { (\$1,000s) }\end{array} & \begin{array} { c } \text { Praject } A \\\text { Probability } ( \% ) \end{array} & \begin{array} { c } \text { Project B} \\\text { Prabability (\%) }\end{array} \\\hline \$ 20 & 10 & 10 \\40 & 15 & 15 \\{ 5 0 } & 50 & { 2 5 } \\{ 8 0 } & 15 & 40 \\100 & 10 & 10\end{array}$$
-What is the expected value of project B (in $1,000s) ?

• A) $60
• B) $65
• C) $70
• D) $75
• E) $80

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Definitions:

Savings

The portion of income that is not spent on consumption but rather set aside for future use or investment.

C

In programming, C is a high-level and general-purpose programming language that is widely used for system and application software, device drivers, and embedded firmware.

Disposable Income

Income available to an individual or household after deducting income taxes and other mandatory charges.

Inventory Investment

The purchase of goods and materials for the purpose of storing them for future sale or use in production.