Graphic Design Inc

question 86

Multiple Choice

Graphic Design Inc.has a project that costs $150,000.It has a 50% chance of a $300,000 payoff and a 50% chance of a $100,000 payoff.What is the expected payoff and the expected profit or loss from the new project?

• A)The expected payoff is $200,000 and the expected profit is $10,000.
• B)The expected payoff is $110,000 and the expected profit is $10,000.
• C)The expected payoff is $200,000 and the expected profit is $50,000.
• D)The expected payoff is $150,000 and the expected loss is $0.

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