Question
Hello everyone, please help me calculate the expected value of the following question. Please don't comment missing references because it's a question from my course
Hello everyone, please help me calculate the expected value of the following question. Please don't comment "missing references" because it's a question from my course homework. Also please show your work of how you did the math. Please don't use the answer that's already on the website. Thank you
You are a Toronto district manager for Nibwaakaawin, a charity that provides financial aid to Indigenous students seeking to attend university. One part of your job is to oversee fundraising for the city. For one of your major fundraising events this year you are thinking of hosting a fancy gala. But the gala being as fancy as you're thinking means it will come with a significant up-front cost, which you estimate at a total of about $15,000 for the 300 people who will attend. Your boss, Federica D'Amore, the VP Fundraising, is skeptical that hosting an event with such a high cost could be profitable.
But having done some research, you are confident that, for events of this calibre, there is a chance that you could bring in as much as $100,000 in donations. While not common, it does happen about 5% of the time! Most often, about 45% of the time, these types of events bring in about $75,000 in donations. Even when the event does not go as well as you hope, about 30% of the time such events are still able to bring in $15,000 in donations. Only rarely do they bring in less. About 15% of the time, they only muster $5,000 in donations and the rest of the time, due to unforeseen circumstances, they end up not bringing anything in at all.
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