Question
Tom wants to avoid any accidents on the work floor of his factory. If an accident does occur, it would cost him $500,000 in damages.
Tom wants to avoid any accidents on the work floor of his factory. If an accident does occur, it would cost him $500,000 in damages. Installing safety equipment would decrease the probability of an accident occurring from 20% to 10%. However, the equipment costs $20,000 to install.
What is his expected loss after installing the safety equipment?
| a. | $50,000 | |
| b. | $20,000 | |
| c. | $100,000 | |
| d. | $125,000 |
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Understanding Business Ethics
Authors: Peter A. Stanwick, Sarah D. Stanwick
3rd Edition
1506303234, 9781506303239
