Mathematics · Probability and Expected Value
A manufacturing company is considering a project that will last for one year. The project's success depends on market conditions. The following forecast annual cash inflows and their associated probabilities have been identified: Market Condition | Probability | Cash Inflow ($) Poor | 0.25 | 40,000 Average | 0.50 | 60,000 Excellent | 0.25 | 100,000 What is the Expected Value (EV) of the cash inflow for this project?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1200,000
- 2$100,000
- 3$65,000✓
- 4$60,000
Correct answer
$65,000
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