Question

An architect is considering bidding for the design of a new museum. The cost of drawing plans and submitting a model is ​$11,000. The probability of being awarded the bid is 0.2. If the architect is awarded the​ bid, she will make ​$180000 minus the ​$55000 cost for plans and a model.

Answer 1

We can compute the expected value using the given values in the problem such as we have the cost of drawing and submitting the model amounting of $11,000.

We also know that once the project is awarded to them, the anticipated profit is $180,000. Therefore, the expected value is just $180,000 minus $55,000 and the answer is $125,000.