Consider the Following Scenario When Answering the Following Questions

question 52

Multiple Choice

Consider the following scenario when answering the following questions:
Ivett and Desiree are considering playing a game called Twenties versus Fifties.In this game,Ivett will place a $20 bill on the table,and Desiree will place a $50 bill on the table.Both players will then toss a fair coin.If both Ivett and Desiree toss heads or if they both toss tails,Ivett wins the $70 on the table.If one woman tosses heads and the other tosses tails,Desiree wins the $70 on the table.
-For Ivett,the expected value of this game is

• A) $0.
• B) $15.
• C) $35.
• D) $70.
• E) $140.

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Definitions:

Profitable Use

The utilization of resources or assets in a manner that generates a significant positive return or profit.

Insufficient Capacity

A situation where a company does not have enough resources, such as manpower or machinery, to meet current or future production demands.

Contribution Margin

The difference between sales revenue and variable costs, indicating the amount contributing to covering fixed costs and profit.

Variable Cost

A cost that changes in proportion to the level of output or activity in a business.