Respuesta :
Answer:
E = -$47,000
the expected value of hiring the oil spill response team is -$47,000
Step-by-step explanation:
Expected value E = expected gain - expected loss
E = gain × probability of gain - loss × probability of loss
E = G×P(G) - L×P(L) .....1
Given;
They would save an estimated 2500 thousand dollars in the event of an oil spill.
G = $250,000
Probability of oil spill is;
P(G) = 1% = 0.01
If they hire an oil spill response team would cost 50 thousand dollar.
L = $50,000
Probability that the money would wasted as there would be no spillage is;
P(L) = 1 - P(G) = 1 - 0.01 = 0.99
Substituting the values into equation 1;
E = $250,000×0.01 - $50,000×0.99
E = -$47,000
the expected value of hiring the oil spill response team is -$47,000
Answer:
-25 thousand dollars
Step-by-step explanation:
Got it right on khan
Hope this helps :)
