Expected Value

Example 5: At a raffle, 50 tickets are sold at $5 each for 3 Event Outcome Probability Product prizes of $100, $50, and $10. You buy one ticket. What is (X) P(X) X . P(X) the expected value of a ticket? Example 6: Your company is considering moving forward with one of two product development plans. Your in-house data analysis team has come back with the following stats. Which product will you recommend, based on expected value? What other factors might influence your decision? Product A: 50% chance net sales of $500,000 Product B: 30% chance net sales of $300,000 ded 30% chance net sales $600,000 60% chance net sales of $200,000 20% chance net sales of $50,000 10% chance net sales of $50,000