SOLUTION: Hello! This is my problem and I tried to work it out. The Sandman construction Co. bids on a job to construct a building. If the bid is won, there is a 0.7 probability of makin

Question 55306: Hello! This is my problem and I tried to work it out.
The Sandman construction Co. bids on a job to construct a building. If the bid is won, there is a 0.7 probability of making a $175,000 profit and there is a probability of 0.3 that the contractor will break even. What is the Expected value?
My solution:
X * P
175,000 0.7 = $122,500
-87,500 0.3 = -26,250
$122,500 - 26,250 = $ 96,250
Thanks for your time and effort.

Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
The Sandman construction Co. bids on a job to construct a building. If the bid is won, there is a 0.7 probability of making a $175,000 profit and there is a probability of 0.3 that the contractor will break even. What is the Expected value?
---------
"Break even" means you make no profit---zero.
Expected profit = (0.7)(175,000)+0.3(0)= $122,500
Cheers,
Stan H.
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