Youve just decided to add a new line to your manufacturing plant. Compute the expected loss/profit from
Question:
You’ve just decided to add a new line to your manufacturing plant. Compute the expected loss/profit from the line addition if you estimate the following:
- There’s a 50% chance that profit will increase by $100,000.
- There’s a 30% chance that profit will remain the same.
- There’s a 20% chance that profit will decrease by $15,000.
a. Gain of $100,000
b. Gain of $70,000
c. Loss of $53,000
d. Gain of $47,000
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Related Book For
Managerial Economics
ISBN: 9781337106665
5th Edition
Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward
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