A retailer is considering building a large store. If the local economy experiences expansion, the firm expects the store to earn a $$2,000,000$ profit next year. If the local econc expects the store to lose $$400,000$ next year. Analysts estimate a $30\%$ chance for the local economy to experience an expansion next year $($hence a $70\%$ chance for contrac $($EMV$)$ of building the large store?

Formula:

Depending on the number of alternatives and various states of nature $($possible future event$)$: EMV of alternative $1$

Outcome of states of nature