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Sagot :
there would be a $21,000 profit.
this is because of the equation:[tex]40,000(.75) + 60,000(.45)+80,000(.30)+(-20,000)(1)= 21,000[/tex]
I would expect a $21,000 profit if I sign with all 3 companies.
Given that my business is looking into three contracting firms, and based on previous research, there is a 75% chance that company 1 will earn me $ 40,000, there is a 45% chance that company 2 will earn me $ 60,000, while Company 3 has a 30% chance of earning me $ 80,000, and it costs $ 20,000 to draw up legal paperwork for each company, to determine how much profit or loss would I expect after this deal is done if I sign with all 3 companies, the following calculation must be performed:
- ((40,000 x 0.75) - 20,000) + ((60,000 x 0.45) - 20,000) + ((80,000 x 0.30) - 20,000) = X
- 30,000 - 20,000 + 27,000 - 20,000 + 24,000 - 20,000 = X
- 81,000 - 60,000 = X
- 21,000 = X
Therefore, I would expect a $21,000 profit if I sign with all 3 companies.
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