A contractor must pay a $40,000 penalty if construction of an expensive home requires more than 16

Question:

A contractor must pay a $40,000 penalty if construction of an expensive home requires more than 16 weeks. He will receive a bonus of $10,000 if the home is completed within 8 weeks. Based on experience with this type of project, the contractor feels there is a 0.2 chance the home will require more than 16 weeks for completion, and there is a 0.3 chance it will be finished within 8 weeks. If the price of the home is $550,000 before any penalty or bonus adjustment, how much can the buyer expect to pay for her new home when it is completed?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: