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Abby must plan for her lemonade stand next Saturday. She can stock (lemons, sugar) a small amount (cost = $10) or a large amount (cost

Abby must plan for her lemonade stand next Saturday. She can stock (lemons, sugar) a small amount (cost = $10) or a large amount (cost = $20) of inventory. But the payoff depends on the weather. The revenues are shown below:

no rain

rain

stock - small amount

25

20

stock - large amount

45

20

The probability of raining on the next Saturday is 0.3. Any leftover stock is worthless.

What is the expected value of profit if she stocks a large amount?

(Note: profit = revenue - cost)

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