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A manager is attempting to assess the probability of a recession ending in the next six months and its impact on expected profitability. The manager

A manager is attempting to assess the probability of a recession ending in the next six months and its impact on expected profitability. The manager believes there is a 70 percent chance the recession will end in six months and profits will return to $40 million. However, there is a 30 percent chance the recession will not end in six months, resulting in a $5 million loss. The expected profits over the next six months are
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$20.2 million.
$30.5 million.
$26.5 million.
$35.5 million.

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