Math  /  Data & Statistics

QuestionQuestion 13 1 pts
Solve the problem.
An architect is considering bidding for the design of a new shopping mall. The cost of drawing plans and submitting a model is \$10,000. The probability of being awarded the bid is 0.12 , and anticipated profits are \$100,000, resulting in a possible gain of this amount minus the \$10,000 cost for plans and a model. What is the expected value in this situation? \$2000 \$11,000 \$10,800 \$12,000

Studdy Solution
Compute the overall expected value:
Expected Value=Expected Gain+Expected Loss \text{Expected Value} = \text{Expected Gain} + \text{Expected Loss}
Expected Value=10,8008,800 \text{Expected Value} = 10,800 - 8,800
Expected Value=2,000 \text{Expected Value} = 2,000
The expected value in this situation is:
2,000 \boxed{2,000}

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