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The proprietor of Midland Construction Company has to decide between two projects. He estimates that the first project will yield a profit of $160,000 with
The proprietor of Midland Construction Company has to decide between two projects. He estimates that the first project will yield a profit of $160,000 with a probability of 0.6 or a profit of $110,000 with a probability of 0.4; the second project will yield a profit of $220,000 with a probability of 0.4 or a profit of $80,000 with a probability of 0.6. A: Find the expected profit for each project.
first project | $ |
second project | $ |
B: Which project should the proprietor choose if he wants to maximize his expected profit, the first project or the second project?
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