King,Inc.,a successful Midwest firm,is considering opening a branch office on the west coast.Under normal economic conditions,with a 45% probability of occurring,King can expect to earn a net income of $50,000 per year.In a mini-recession,at 25% probability,King will earn $20,000.In a severe recession,at a 20% probability,King will lose $10,000.There is also a slight probability (10%)that King will lose $300,000 if the expansion fails and the branch office must be closed.Should King open a branch office in British Columbia?

Question

Quizplus · Accepted Answer

The Answer of King,Inc.,a successful Midwest firm,is considering opening a branch office on the west coast.Under normal economic conditions,with a 45% probability of occurring,King can expect to earn a net income of $50,000 per year.In a mini-recession,at 25% probability,King will earn $20,000.In a severe recession,at a 20% probability,King will lose $10,000.There is also a slight probability (10%)that King will lose $300,000 if the expansion fails and the branch office must be closed.Should King open a branch office in British Columbia?

King,Inc,a Successful Midwest Firm,is Considering Opening a Branch Office on the West