Question 519937: A store specializing in mountain bikes is to open in one of two malls. If the first mall is selected, the store anticipates a yearly profit of $300,000 if successful, and a yearly loss of $100,000 otherwise. The probability of success is .5. If the second mall is selected, it is estimated that the yearly profit will be $200,000 if successful; otherwise, the annual loss will be $60,000. The probability of success at the second mall is .75.
What is the expected profit for the second mall?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! If the second mall is selected, it is estimated that the yearly profit will be $200,000 if successful; otherwise, the annual loss will be $60,000. The probability of success at the second mall is .75.
What is the expected profit for the second mall?
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E(x) = 0.75*200000 + 0.25(-60,000)
E(x) = $135,000
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Cheers,
Stan H.
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