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On April 1, Bob the Builder signed a month-long contract to build a barn for Nolan. Bob is guaranteed to receive a flat fee of
On April 1, Bob the Builder signed a month-long contract to build a barn for Nolan. Bob is guaranteed to receive a flat fee of $ 5,000 for his services, plus a bonus depending on when the project is completed. Nolan offered to pay an additional $ 1,500 of the flat fee if the project was completed 2 weeks early. The probability of finishing 2 weeks early is 40% What is the price of this contract for Bob under the expected value method?
Select one: a. $ 5,900 b. $ 5,000 c. $ 6,500 d. $ 5,600
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