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A manufacturer is considering building a new and better mousetrap. She estimates the probability that the new mousetrap will be successful is 3434. If it is successful, it would be able to make $120,000. Of course, she would make nothing if it were unsuccessful. The development costs for the mousetrap are $98,000. What is the expected value?

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battlefortroy
The 3434 was supposed to be 3/4, correct?

If she makes it, she gets 120,000
If she fails, she looses 98,000
3/4=.75
Leaving 1/4, .25
.75*120,000-.25*98,000=65,500
$65,500 is the expected value, should she proceed as planned.
~Hope this helps!

The expected value is $65,500. The expected value is obtained by its standard formula.

What is probability, exactly?

Probability denotes the likelihood of something happening. It is concerned with the occurrence of an unexpected event.

Probability can only have a value between 0 and 1. Its simple notion is that something will most likely occur. The favorable event's proportion to the overall number of occurrences.

The probability that the new mousetrap will be successful is,[tex]\rm \frac{3}{4}[/tex]

The probability that the new mousetrap will be unsuccessful is;

[tex]\rm P(failure) = 1-P(success) \\\\ P(failure)=1-\frac{3}{4} \\\\ P(failure) =\frac{1}{4}[/tex]

The expected value is;

Expected value =  p(success) ×Earned money+ p(failure)×development costs

[tex]\rm E(X) = P(S) \times C + P(F) \times D \\\\\ E(x)=\frac{3}{4} \times \$ 120000 +\frac{1}{4}\times \$ 98,000 \\\\ E(X) = \$65000[/tex]

To learn more about the probability, refer to the link;

https://brainly.com/question/795909

#SPJ2

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