There Is a 30% Probability That an Office Building Will

question 27

Multiple Choice

There is a 30% probability that an office building will be sold after five years for $30 million, a 50% probability that it will be sold for $20 million and a 20% probability that it will be sold for $10 million.What is the expected value of the office building in five years?

• A)$20 million
• B)$21 million
• C)$30 million
• D)$10 million

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Definitions:

Wind Up

The process of concluding or finalizing the affairs of a business or an entity, leading towards its dissolution.

Sole Proprietorship

is a business structure where a single individual owns and operates the business, assuming sole responsibility for its debts and obligations.

Unlimited Liability

A legal structure in business where the owner's personal assets can be used to satisfy the business's debts and liabilities.

State Statute

Legislation enacted by a state legislature or established by a state court.