Question
Management at Visync Hospital Center is thinking about two investments in medical dispensing systems. Both systems will save the hospital money but in different amounts
Management at Visync Hospital Center is thinking about two investments in medical dispensing systems. Both systems will save the hospital money but in different amounts depending on the system usage. System I can save $100,000 in labor during periods of high usage or $60,000 in labor during periods of low usage. System II can save $150,000 in labor during periods of high usage or $10,000 in labor during periods of low usage. The decision depends on the economic conditions. What is the expected value of both systems when the probability of high usage is 60%?
A. Expected value for System I = $100,000; Expected value for System II = $150,000
B. Expected value for System I = $94,000; Expected value for System II = $84,000
C. Expected value for System I = $84,000; Expected value for System II = $94,000
D. Expected value for System I = $60,000; Expected value for System II = $10,000
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