Problem 1

The project you are working on has a 50% chance of succeeding, and if it does, it will deliver a $1,750,000 payout to the company. If it fails, it will pay nothing. What is the "expected value" of the project?

Problem 2

The project you are working on has a 30% chance of succeeding, and if it does, it will deliver a $2,750,000 payout to the company. If it fails, it will pay nothing. What is the expected value of the project?

Problem 3

The project you are working on has a 35% chance of succeeding very well, and if it does, it will deliver a $1,500,000 payout to the company. There is a 40% chance that it will do "average," in which case it will deliver a $475,000 payout to the company. If it fails completely, it will pay nothing. What is the expected value of the project?

Problem 4

The project you are working on has a 18% chance of succeeding very well, and if it does, it will deliver a $7,500,000 payout to the company. There is a 57% chance that it will do "OK," in which case it will deliver a $2,250,000 payout to the company. If it fails completely, it will pay nothing. What is the expected value of the project?

Problem 5

The project you are working on has a 12% chance of succeeding very well, and if it does, it will deliver a $12,500,000 payout to the company. There is a 48% chance that it will do "OK," in which case it will deliver a $3,750,000 payout to the company. There is a 25% chance that it will fail, and if it does, it will pay nothing. The only other possibility is that it will backfire, in which case the company will owe a penalty of $1,750,000. What is the expected value of the project?

Problem 6

The project you are working on has a 21% chance of succeeding very well, and if it does, it will deliver a $7,500,000 payout to the company. There is a 34% chance that it will do "OK," in which case it will deliver a $2,250,000 payout to the company. There is a 26% chance that it will fail, and if it does, it will pay nothing. The only other possibility is that it will backfire, in which case the company will owe $4,025,000. What is the expected value of the project?

Problem 7

The project you are considering has a 17% chance of succeeding very well, and if it does, it will deliver a $8,750,000 payout to the company. There is a 54% chance that it will do "OK," in which case it will deliver a $2,850,000 payout. If it fails completely, it will pay nothing (these are the only possibilities). If it costs $2,500,000 to invest in the project, would you choose to do it?

Problem 8

The project you are considering has a 22% chance of succeeding very well, and if it does, it will deliver a $75,000,000 payout to the company. There is a 41% chance that it will do "OK," in which case it will deliver a $15,000,000 payout to the company. If it fails completely, it will pay nothing. If it costs $20,000,000 to invest in the project, would you choose to do it?