Bob, the proprietor of Midway Lumber, bases his projections for the annual revenues of the company on the performance of the housing market. He rates the performance of the market as very strong, strong, normal, weak, or very weak. For the next year, Bob estimates that the probabilities for these outcomes are 0.15, 0.23, 0.41, 0.10, and 0.11, respectively. He also thinks that the revenues corresponding to these outcomes are $25, $18.5, $16.8, $14, and $13 million, respectively. What is Bob's expected revenue for next year? (Round your answer to two decimal places.) $ million

A company is trying to decide if they should make a bid on a project that would generate 450,000 in profit. It will cost $100,000 to develop the bid and they will have a 35% chance of winning the contract. What is the expected net profit (project profit less bid development cost) associated with making the bid?

Bob, the proprietor of Midway Lumber, bases his projections for the annual revenues of the company on the performance of the housing market. He rates the performance of the market as very strong, strong, normal, weak, or very weak. For the next year, Bob estimates that the probabilities for these outcomes are 0.19, 0.27, 0.37, 0.07, and 0.10, respectively. He also thinks that the revenues corresponding to these outcomes are $20, $18.4, $16.8, $16, and $11 million, respectively. What is Bob's expected revenue for next year? (Round your answer to two decimal places.)

A man buys a racehorse for $25,000 and enters it in two races. He plans to sell the horse​ afterward, hoping to make a profit. If the horse wins both​ races, its value will jump to $105,000. If it wins one of the​ races, it will be worth $65,000. If it loses both​ races, it will be worth only $10,000. The man believes there is a 30​% chance that the horse will win the first race and a 35​% chance that it will win the second one. Assuming that the two races are independent​ events, find the​ man's expected profit.

A lawyer considers taking a case figures that there is a 40% chance of winning the case in court and earning his firm $400,000, a 50% chance of losing the case in court and costing his firm $150,000, and a 10% chance of settling out of court and bringing in $200,000. What is the expected payoff of the case for the firm?

A consumer is given the chance to buy a baseball card for $1, but hedeclines the trade. If the consumer is now given the baseball card, willhe be willing to sell it for $1? Standard consumer theory suggests yes, butbehavioral economists have found that “ownership” tends to increase thevalue of goods to consumers. That is, the consumer may hold out for someamount more than $1 (for example, $1.20) when selling the card, eventhough he was willing to pay only some amount less than $1 (for example,$0.88) when buying it. Behavioral economists call this phenomenon the“endowment effect.” John List investigated the endowment effect in a randomized experiment involving sports memorabilia traders at a sports-card show. Traders were randomly given one of two sports collectibles, say good A or good B, that had approximately equal market value.1 Those receiving good A were then given the option of trading good A for good B with the experimenter; those receiving good B were given the option of…

Charlie buys a one-year term home insurance policy for $p, that will pay $200,000 in the event of a major catastrophe and $35,000 in the event of a minor catastrophe. Charlie's home has a 0.2% chance of a major catastrophe and a 0.7% of a minor catastrophe during the one year term.  What did the insurance company charge Charlie for this policy if the company expected to break even?

Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an investment strategy designed to reduce volatility in which securities are purchased in fixed dollar amounts at regular intervals regardless of what direction the market is moving. This strategy is also called the constant dollar plan. You are considering a hypothetical $1,200 investment in a media company's stock. Your choice is to invest the money all at once or dollar-cost average at the rate of $100 per month for one year. Assume that the company allows you to purchase "fractional" shares of its stock. (a) If you invested all of the money in January and bought the shares for $12 each, how many shares could you buy?  shares (b) From the following chart of share prices, calculate the number of shares that would be purchased each month using dollar-cost averaging and the total shares for the year.…

Question 2 A venture capitalist, willing to invest $1,000,000, has three investments to choose from. The first investment, a software company, has a 15% chance of returning $11,000,000 profit, a 31% chance of returning $2,000,000 profit, and a 54% chance of losing the million dollars. The second company, a hardware company, has a 16% chance of returning $9,000,000 profit, a 26% chance of returning $1,000,000 profit, and a 58% chance of losing the million dollars. The third company, a biotech firm, has a 13% chance of returning $6,000,000 profit, a 32% of no profit or loss, and a 55% chance of losing the million dollars. Order the expected values from smallest to largest. O first, third, second Ofirst, second, third Othird, first, second O third, second, first second, first, third O second, third, first Hint: Hint Video on Expected Value [+]

The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For each reservation accepted, there is a 5% chance that the guest will not arrive. If the hotel overbooks, it costs $200 to compensate guests whose reservations cannot be honored. How many reservations should the hotel accept if it wants to maximize the average daily profit?