Question: using random variables and probability Option A, they incur $200 million in costs, have an 85 percent chance of production, and receive $3.33 billion in

using random variables and probability

Option A, they incur $200 million in costs, have an 85 percent chance of production, and receive $3.33 billion in profit. Launching Option B incurs $600 million in costs, has a fifty (50) percent chance of production, and is projected to yield $5.5 billion in profit

what should the firm do?

diagram the consequences

is the formula (.85) x $3.33 billion + (.15) x -$200 million

(.5) x $5.5 billion + (.5) x -$600 million

if so, what are the totals?

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