Given the survey will predict a strong market, the expected monetary value of building a small facility is _______.
A)$7,300
B)$12,300
C)$10,800
D)$2,800

Question

Quizplus · Accepted Answer

The expected monetary value (EMV) of building a small facility is $7,300. This is calculated by multiplying the probability of a strong market (0.6) by the profit if a strong market occurs ($12,000), and then subtracting the probability of a weak market (0.4) by the loss if a weak market occurs ($4,700).

Given the Survey Will Predict a Strong Market, the Expected