Lobster Liquidators Will Make $500,000 If the Fishing Season Weather

question 86

Multiple Choice

Lobster Liquidators will make $500,000 if the fishing season weather is good,$200,000 if the weather is fair,and would actually lose $50,000 if the weather is poor during the season.If the weather service gives a 40% probability of good weather,a 25% probability of fair weather,and a 35% probability of poor weather,what is the expected monetary value for Lobster Liquidators?

• A) $500,000
• B) $232,500
• C) $267,500
• D) $200,000

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Definitions:

Erosion

In finance, the gradual reduction of earnings or assets, often due to competition or other external factors.

Patent

A form of intellectual property right granting the patent holder the exclusive right to make, use, sell, and offer for sale the patented invention for a certain period of time.

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Final Cash Flow is the last cash inflow or outflow in a series of transactions, often associated with the termination or exit of an investment.

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The process of creating a new product to be sold by a business to its customers.