Please answer the question above A construction company is planning to bed on a

Question

Please answer the question above

A construction company is planning to bed on a building contact. The bid costs the company $1000. The probability that the bad is accepted is 1/10, if the bad accepted the company cost of the bid. a. What is the expected value in this solution? (Round to the nearest dollar) b. Choose the statement below that best describes what this value means. A. In the long run, the construction company would expect to break even on average B. In the long run, the construction company would expect to earn this amount on average per bid C. In the long run, the construction company would expect to lose this amount on average per bid D. None of the above

Explanation / Answer

Expected value = (1/10)x85000 - 1000

= $7500

b. B. In the long run, the construction company would expect to earn this amount on average per bid

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