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A manufacturer is considering building a new and better mousetrap. She estimates the probability that the new mousetrap will be successful is . If it is successful, it would be able to make $120,000. Of course, she would make nothing if it were unsuccessful. The development costs for the mousetrap are $98,000. What is the expected value?
8,000
-$8,000
$22,000
-$32,000

User Shredder
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1 Answer

5 votes

Answer:

$22,000

Explanation:

Subtract the development cost from the amount it would make.

And boy, that's one expensive mousetrap.

User Segmentation Fault
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