Solve the Problem. -A Contractor Is Considering a Sale That Promises a Profit

question 14

Multiple Choice

Solve the problem.
-A contractor is considering a sale that promises a profit of $26,000 with a probability of 0.7 or a loss (due to bad weather, strikes, and such) of $1000 with a probability of 0.3. What is the expected Profit?

• A) $18,200
• B) $25,000
• C) $18,900
• D) $17,900

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Definitions:

Maturity Period

The duration or lifetime until a financial instrument, such as a bond or loan, is due to be repaid in full.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the total amount loaned.

Spin-Offs

The creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company.