John Is Trying to Decide Whether to Expand His Business

question 20

Multiple Choice

John is trying to decide whether to expand his business or not.If he continues his business as it is,with no expansion,there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000.If he does expand,there is a 30 percent chance he will earn $100,000,a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000.It will cost him $150,000 to expand.The difference in expected earnings if John chooses to expand versus not expand is:

• A)$120,000.
• B)$320,000.
• C)$200,000.
• D)$150,000.

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Definitions:

Food Pyramid

A visual representation to illustrate the recommended balance of different food groups in a healthy diet.

Available Energy

The portion of energy in a system that can be used to perform work.

Trophic Level

A position that an organism occupies in a food chain, which is a way of categorizing living things according to how they gain their energy.

Harvest

The process of gathering ripe crops from the fields, or the period during which this activity occurs.