The Head of Operations for a Movie Studio Wants to Determine

question 19

Multiple Choice

The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production.She feels that script #1 has a 70% chance of earning $100 million over the long run,but a 30% chance of losing $20 million.If this movie is successful,then a sequel could also be produced,with an 80% chance of earning $50 million,but a 20% chance of losing $10 million.On the other hand,she feels that script #2 has a 60 % chance of earning $120 million,but a 40% chance of losing $30 million.If successful,its sequel would have a 50% chance of earning $80 million and a 50% chance of losing $40 million.As with the first script,if the original movie is a "flop",then no sequel would be produced.
-What is the expected payoff from selecting script #1?

• A)$150 million
• B)$90 6 million
• C)$84 million
• D)$72 million
• E)$60 million

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Definitions:

Medical Record

A comprehensive document containing a patient's medical history and personal information.

Objective Statement

A concise and clear declaration of the goals or intent, often seen at the beginning of resumes.

Heart Rate

The number of heartbeats per unit of time, usually measured in beats per minute (bpm), indicating the rate at which the heart is working.

Elevated

A term often used to describe an increase or higher level of something, such as elevated body temperature, suggesting a fever or infection.