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2.14 A potential purchaser of a ferry across a river knows that if a ow of 100,000 cfs or more occurs, the ferry will be

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2.14 A potential purchaser of a ferry across a river knows that if a ow of 100,000 cfs or more occurs, the ferry will be washed downstream, over a low dam and destroyed. He knows that the probability of a ow of this kind in any year is 0.05. He also knows that for each year that the ferry operates a net prot of $10,000 is realized. The purchase price of the ferry is $50,000. Sketch the probability distribution of the potential net prot over a period of years neglecting interest rates and other complications. Assume that if a ow of 100,000 cfs or more occurs in a year, the prot for that year is zero

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