Self-Study Questions

1.The AE(MARR) of the outcomes and their probabilities for the Uinta project at Mountain Systems Western Division are shown in the following table.
 Least- Favorable OutcomeFair OutcomeMost-Favorable Outcome
AE(MARR)–$2166$2008$6124
Probability of outcome20%55%25%

What is the expected value of this project?

2.The AE(MARR) of the outcomes and their probabilities for the Wasatch project at Mountain Systems Western Division are shown in the following table.
 Least- Favorable OutcomeLow Nominal OutcomeHigh Nominal OutcomeMost- Favorable Outcome
AE(MARR)–$16,455–$1216$14,211$18,578
Probability of outcome20%30%40%10%

What is the expected value of this project?

3.The proposed Chardonnay project at Bay Laboratories has an initial investment ...

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