A screenwriter has completed a script for a new movie. ABC studio has offered to a) buy the script from her outright for $10,000 or b) begin the process of reading her script for which she would then receive 1.5% of the movies expected profits and shared losses. Compute the expected value of option b) and make a recommendation to her to accept offer a) or b) based on your calculations.

Big audience $30,000,000 30% Movie is good Make movie 10% Script is good Movie is bad Read script Small audience 70% Script is bad -$8,000,000 Don't make movie 90% No profit Big audience $30,000,000 30% Movie is good Make movie 10% Script is good Movie is bad Read script Small audience 70% Script is bad -$8,000,000 Don't make movie 90% No profit