could someone explain as the attached?

2003, eeney antibacteriat FAC MASK An Example How hedge adds value Consider a firm with cost per unit of $10 The selling price is either $11.20 or $9, with 50% probability Thus, the firm has either a $1.20 profit or $1 loss The expected profit per unit $0.10 If the tax rate on profit is 40%, after-tax profit is either $0.72 or $1 After-tax expected profit = -$0.14 - 125