## keebler01 Group Title The property restoration company PuroServ is considering switching to new dehumidifiers. Their market research, considering the cost of the new machines and their efficiency, tells them that the switch would give them a 75% chance of making a $20,000 profit, a 20% chance of breaking even, and a 5% chance of losing$5,000. How much money does PuroServ expect to make with their new purchase? please show work 3 years ago 3 years ago

1. coolaid

dont worry

2. coolaid

some ons coming

3. coolaid

:D

4. Ishaan94

keebler I am sorry but I never did a question like this. I will try to get some help.

5. dumbcow

its expected value, kind of like a weighted average $EV = \sum_{}^{}x*p(x)$ where x is profit made and p(x) is the probability of making that profit

6. keebler01

dumbcow i dont get it!!

7. dumbcow

so (20,000)(0.75) + (0)(0.2) + (-5000)(0.05)

8. dumbcow

multiply each probability by its corresponding profit

9. Hashir

:D

10. Hashir

it is easy

11. keebler01

thank u dumbcow

12. dumbcow

no problem what do you get after adding them up

13. keebler01

hold on!

14. keebler01

it gave me a wired number!

15. dumbcow

hmm should be 14,750 .75*20,000 - .05*5000