Question: In a product liability case, a company can settle out of court for a loss of $350,000, or go to trial, losing $1,300,000 if found

In a product liability case, a company can settle out of court for a loss of $350,000, or go to trial, losing $1,300,000 if found guilty and nothing if found not guilty. Lawyers for the company estimate the probability of a not-guilty verdict to be 0.8.

What is the expected value of the amount the company can lose by taking the case to court?

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