The Herald Tribune Inc.has a project that costs $400,000.It has a 30% chance of a $1,000,000 payoff and a 70% chance of a $200,000 payoff.What is the expected payoff and the expected profit or loss from the new project?
A) The expected payoff is $1,000,000,and the expected loss is $200,000.
B) The expected payoff is $440,000,and the expected profit is $10,000.
C) The expected payoff is $400,000,and the expected loss is $40,000.
D) The expected payoff is $440,000,and the expected profit is $40,000.
Correct Answer:
Verified
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