Outcomes, Expected Values and Information Value: Strange Happenings. Inc., is considering producing a new horror movie. Production and distribution costs are estimated at $15 million. Strange estimates the following probabilities for cash inflows from the movie: 

Required:

a. What is the expected value of the movie?

b. What are the possible outcomes if Strange Happenings decides to produce and distribute the movie?

c. How much would Strange be willing to pay to find out for certain if the movie was going to be a blockbuster or a dud?

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Probability $50 million $ 3 million .3 .7