Answer:
$19,100
Step-by-step explanation:
The expected profit would be the probability of profit multiplied by the profit and the sum of probability of loss multiiplied by the loss.
So, we can say:
E(p) = P(p)*P + P(L)*L
Where
E(p) is expected profit
P(p) is probabilty of profit (0.7)
P is the profit (35,000)
P(L) is probability of loss (0.3)
L is the loss (-18,000)
Substituting these values, we get:
E(p) = P(p)*P + P(L)*L
E(p) = (0.7)(35,000) + (0.3)(-18,000)
E(p) = 19,100
The expected profit is $19,100
