What is the expected value of selecting script #1?
A)$15,000,000
B)$9,060,000
C)$8,400,000
D)$7,200,000
E)$6,000,000

Question

Quizplus · Accepted Answer

To calculate the expected value, we take the probability of each outcome and multiply it by the corresponding value. 
For Script #1: 
- 40% chance of earning $20,000,000 = 0.4 * 20,000,000 = $8,000,000 
- 60% chance of earning $0 = 0.6 * 0 = $0 
Total expected value for Script #1 = $8,000,000. 
Therefore, choosing Script #1 has an expected return of $8,000,000, which is greater than any of the other options.

What Is the Expected Value of Selecting Script #1