Depending upon the state of the economy, Ables Manufacturing Corp. expects to sell the following number of prefabricated buildings. The probability of each state is indicated. What is the expected value of the total sales projection? $$\begin{array} { c c c c }
\text { Outcome } & \text { Probability } & \text { Units } & \text { Price } \
\text { Bad } & 0.15 & 75 & \$ 25 \
\text { Normal } & 0.60 & 150 & \$ 35 \
\text { Great } & 0.25 & 200 & \$ 45
\end{array}$$

Question

Depending upon the state of the economy, Ables Manufacturing Corp. expects to sell the following number of prefabricated buildings. The probability of each state is indicated. What is the expected value of the total sales projection? $$\begin{array} { c c c c } 
\text { Outcome } & \text { Probability } & \text { Units } & \text { Price } \
\text { Bad } & 0.15 & 75 & \$ 25 \
\text { Normal } & 0.60 & 150 & \$ 35 \
\text { Great } & 0.25 & 200 & \$ 45
\end{array}$$

Quizplus · Accepted Answer

The expected value is calculated as: (0.15 * 75 * 25) + (0.60 * 150 * 35) + (0.25 * 200 * 45) = $5,625.

Depending Upon the State of the Economy, Ables Manufacturing Corp