Consolidate Edison Power is evaluating the construction of a new electric generation facility. The two choices are a coal burning plant (CB) or a gaseous diffusion (GD) plant. The CB plant will cost $150 per megawatt to construct, and the GD plant will cost $300 per megawatt. Due to uncertainties concerning fuel availability and the impact of future air- and water- quality regulations, the useful life of each plant is unknown, but the following probability estimates have been made.

(a) Determine the expected life of each plant.
(b) Based on the ratio of construction cost per megawatt to expected life, which plant would you recommend ConEdbuild?

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Probabilities Useful CB plant GD Plant life (years) 10 20 30 40 0.1 0.5 0.3 0.1 0.05 0.25 0.5 0.2