SOLUTION: A ski resort profits $1,300,000 during a good winter with lots of snow. The resort has a loss of $425,000 otherwise. The resort�s historical climate data suggests that the probab

Question 263244: A ski resort profits $1,300,000 during a good winter with lots of snow. The resort has a loss of $425,000 otherwise. The resort�s historical climate data suggests that the probability of a good winter with lots of snow during any given year is 50%. What is the expected profit for the ski resort?

Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A ski resort profits $1,300,000 during a good winter with lots of snow. The resort has a loss of $425,000 otherwise. The resort�s historical climate data suggests that the probability of a good winter with lots of snow during any given year is 50%. What is the expected profit for the ski resort?
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E(x) = 0.5(1300000)-0.5(425000) = $437,500
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Cheers,
Stan H.
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