QUESTION 1 Scenario5: Engineers at Jalopy Automotive have discovered a safety flaw in their new model car. It would cost$500 per car to fix theflaw, and10,000 cars have been sold. The company works out the following possible scenarios for what might happen if the car is notfixed, and assigns probabilities to thoseevents:

Scenario Probability Cost A No one discovers flaw 0.15 $0 B Government fines firm (no lawsuits) 0.40 $10 million

C Resulting lawsuits are lost (no governmentfine) 0.30 $12 million

D Resulting lawsuits are won(no governmentfine) 0.15 $2 million

Refer to Scenario 5.

The expected cost to the firm if it does not fix the car is

A. $24 million.

B. $7.9 million.

C. $2 million.

D. $0

E. $3.6 million.