Question 1057935
It seems like a typo.


Instead of 
(5000 + 1500 + 1000 + 1000 - 50*12)/16 = 493.75
it should be
(4000 + 1500 + 1000 + 1000 - 50*12)/16 = 431.25


So the expected winnings is 431.25 which is not that larger compared to $400. 


So choice 1, where you take the $400 and not play the game, still seems like the better option.