Decision analysis. After careful testing and analysis, an oil company is considering drilling in two different sites. It is estimated that site A will net $20million if successful (probability .3) and lose $3 million if not (probability .7); site B will net $60 million if successful (probability .2) and lose $8 million if not (probability .8). Which site should the company choose according to the expected return from each site?

a. What is the expected return for site A?

b. What is the expected return for site B?

c. Which site should the company choose?

Site B

Site A