document.write( "Question 285308: shawn and maddie purchase a foreclosed property for $50,000 and spend an additional $27,000 fixing up the property. They feel they can sell the property for $120,000 with probabilty 15%, $100,000 with probability 45%, $80,000 with probability 25% and $60,000 with probability 15%. Compute and interpret the expected profit for reselling the property \n" ); document.write( "

Algebra.Com's Answer #206866 by stanbon(75887) $\"\"$ $\"About$

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shawn and maddie purchase a foreclosed property for $50,000 and spend an additional $27,000 fixing up the property.
\n" ); document.write( "They feel they can sell the property for
\n" ); document.write( "$120,000 with probabilty 15%, profit = 43000
\n" ); document.write( "$100,000 with probability 45%; profit = 23000
\n" ); document.write( "$80,000 with probability 25%; profit = 3000
\n" ); document.write( "$60,000 with probability 15%; profit = -17000
\n" ); document.write( "-------------------------------------
\n" ); document.write( "Compute and interpret the expected profit for reselling the property:
\n" ); document.write( "E(profit) = 0.15*43000 + 0.45*23000 + 0.25*3000 - 0.15*17000
\n" ); document.write( "---
\n" ); document.write( "E(profit) = $15000
\n" ); document.write( "==========================
\n" ); document.write( "Cheers,
\n" ); document.write( "Stan H.
\n" ); document.write( " \n" ); document.write( "

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