A firm is considering a one-time sale of $100,000 to a customer.The cost of goods sold for this sale is $90,000.If the probability of the customer paying is 0.8,what is the expected profit from this transaction?
A) $0
B) −$10,000
C) +$8,000
D) +$10,000

Question

Quizplus · Accepted Answer

Expected profit = 0.8($100,000 − 90,000) − (1 − 0.8)($90,000) = −$10,000

A Firm Is Considering a One-Time Sale of $100,000 to a Customer.The