# SOLUTION: A company brings a new product to market: The probability of loosing \$1,000,000 is 10% The probability of loosing \$500,000 is 20% The probability of breaking even is 20% The pr

Algebra ->  Algebra  -> Probability-and-statistics -> SOLUTION: A company brings a new product to market: The probability of loosing \$1,000,000 is 10% The probability of loosing \$500,000 is 20% The probability of breaking even is 20% The pr      Log On

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 Click here to see ALL problems on Probability-and-statistics Question 570867: A company brings a new product to market: The probability of loosing \$1,000,000 is 10% The probability of loosing \$500,000 is 20% The probability of breaking even is 20% The probability of making \$500,000 profit is 20% The probability of making \$2,000,000 profit is 30% what is the expected profit? I can calculate this ((2,000,000*.3)+(500000*.2)) - ((1,000,000*.1)+(500,000*.2)) yields 700,000-200000 = \$500,000 expected profit. but im not sure how to handle the 20% probability of breaking even, 0 * 20% = 0? how is this factored in to my calculations?Answer by richard1234(5390)   (Show Source): You can put this solution on YOUR website!Do it just like you did with the other numbers. Expected value for this problem is defined as the sum of (profit)*(probability of that profit), so with the case of zero profit, you would add 0*.2, or 0. Since your other numbers are correct, you can just add everything and obtain \$500,000.