Question: A recently introduced computer game has the following probability distributions of expected present worth returns and expected standard deviations. Probability Net Present Worth Standard Deviation
A recently introduced computer game has the following probability distributions of expected present worth returns and expected standard deviations.
| Probability | Net Present Worth | Standard Deviation |
| 10% | ($130,000) | $20,000 |
| 20% | ($10,000) | $2,000 |
| 30% | $170,500 | $15,000 |
| 20% | $290,000 | $30,000 |
| 10% | $325,000 | $20,000 |
a. What is the expected present worth for this computer game?
b. What is the expected standard deviation of this investment?
c. What is the probability that this investment will be profitable?
d. Would you recommend that management invest in this project and why or why not?
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