​You Can Invest $100,000 into Either Project a or B

question 31

Multiple Choice

​You can invest $100,000 into either project A or B.You estimate that A would succeed with a probability of 0.7 in which case it doubles in value.If it fails,its scrap value is $50,000.Project B would succeed with probability 0.6,in which case it would have a value of $150,000.If it fails,project B's scrap value is $30,000.Which project should you invest in?

• A)​Project A
• B)Project B
• C)Neither of the projects
• D)​You cannot tell from the information presented

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Definitions:

Statistical Process Control

A system in which management collects and analyzes information about the production process to pinpoint quality problems in the production system.