Question

A consulting company claims that if job seekers attend the company's career development course, their chance of obtaining a job is greatly increased. The company also claims if the job-seeker obtains a job, the course will increase their annual salary by $7,295.00. Kevin, a job-seeker, must decide whether to pay to attend the company's career development course. The cost of the course is $2,763.00, and the average salary in Kevin's desired profession is $61,207.11. Suppose Kevin's chance of getting a job over the next year is 76%. What should Kevin do if he wants to maximize his earnings over the next year?

Kevin should not attend the career development course because the expected value of attending the career development course is greater than the expected value of not attending the career development course.


Kevin should attend the career development course because the expected value of attending the career development course is less than the expected value of not attending the career development course.


Kevin should not attend the career development course because the expected value of attending the career development course is less than the expected value of not attending the career development course.


Kevin should attend the career development course because the expected value of attending the career development course is greater than the expected value of not attending the career development course.

Answer 1

Kevin should attend the career development course because the expected value of attending the career development course is greater than the expected value of not attending the career development course.

Explanation:

If the consulting company claims that if job seekers attend the company's career development course their chance of obtaining a job is greatly increased is true then Kevin's chance of getting a job over the next year which is 76% will greatly increase.

The average salary in Kevin's desired profession is $61,207.11 if he attends the company career development course then there would be an increase of $7, 295.00. To sum, Kevin is expected to receive an annual salary of $68, 502.11. The cost of the course is only $2,763.00. If we subtract the cost from his annual salary: $68,502.11 - 2763 = $65, 739.11, there would be an increase on his salary. So, Kevin should attend the career development course because the expected value of attending the career development course is greater than the expected value of not attending the career development course.