What Is the Expected Value of the Probability Distribution for the Following

question 34

Essay

What is the expected value of the probability distribution for the following product? $$\begin{array} { | l | c | } \hline N P V & \text { Estimated probability of Product Alpha } \\\hline £ 4,500 & 0.1 \\\hline £ 6,000 & 0.1 \\\hline £ 7,500 & 0.2 \\\hline £ 9,000 & 0.2 \\\hline £ 10,500 & 0.2 \\\hline £ 12,000 & 0.1 \\\hline £ 13,500 & 0.1 \\\hline\end{array}$$

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Definitions:

Multi-Product Organization

A company that produces and sells more than one type of product, often requiring complex management of resources and market strategies.

Single Product Organization

A business structure focused on the production and sale of one specific type of product.

Activity-Based Costing

An accounting method that assigns costs to products and services based on the activities and resources that go into producing them.

Single Overhead Rate

A method in cost accounting where a single rate is used to allocate each unit of overhead to products or cost objects.