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monroe17
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An architect is considering bidding for the design of a new shopping mall. The cost of drawing plans and submitting a model is $10,000. The probability of being awarded the bid is 0.13, and the anticipated profits are $100,000. What is the expected value in this situation?
is it 3000?
I did 100,00010,000=90,000
10,000(0.87)+90,000(0.13)=3,000?
 2 years ago
 2 years ago
monroe17 Group Title
An architect is considering bidding for the design of a new shopping mall. The cost of drawing plans and submitting a model is $10,000. The probability of being awarded the bid is 0.13, and the anticipated profits are $100,000. What is the expected value in this situation? is it 3000? I did 100,00010,000=90,000 10,000(0.87)+90,000(0.13)=3,000?
 2 years ago
 2 years ago

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JayDS Group TitleBest ResponseYou've already chosen the best response.0
I am not too sure about this but I believe the answer should be $11700? because the expected value of the bidding design of $3000 shouldn't be lower than it's cost and plans. I'm not too sure on this one.
 2 years ago

monroe17 Group TitleBest ResponseYou've already chosen the best response.1
@apoorvk can you verify? ;D
 2 years ago

monroe17 Group TitleBest ResponseYou've already chosen the best response.1
11,700 is an option too. A $11,700 B $12,000 C $13,000 D $3,000
 2 years ago

apoorvk Group TitleBest ResponseYou've already chosen the best response.0
@monroe17 your explanation and answer seem pretty correct to me, still @Callisto would know probability and stuff better. (Am having trouble regarding 'expected value' means in this context).
 2 years ago

monroe17 Group TitleBest ResponseYou've already chosen the best response.1
Save me Callisto:D
 2 years ago

monroe17 Group TitleBest ResponseYou've already chosen the best response.1
hmm, anything? :)
 2 years ago

apoorvk Group TitleBest ResponseYou've already chosen the best response.0
@ash2326 to the rescue!
 2 years ago

JayDS Group TitleBest ResponseYou've already chosen the best response.0
LOL, lets call everyone lmao.
 2 years ago

monroe17 Group TitleBest ResponseYou've already chosen the best response.1
Lets DO IT! ;) I feel like this question isn't even really that hard though?
 2 years ago

apoorvk Group TitleBest ResponseYou've already chosen the best response.0
@experimentX @Diyadiya @dpaInc !!!!!!!!!!!!!!
 2 years ago

experimentX Group TitleBest ResponseYou've already chosen the best response.0
expected value of what??
 2 years ago

Callisto Group TitleBest ResponseYou've already chosen the best response.4
According to Wiki, Expected value = amount paid x P(lose) + payoff x P(win) = 10000 x (10.13) + (10000010000) x (0.13) = 10000 x 0.87 + 90000 x 0.13 = 3000 If I got the term 'payoff' correct, then that's it. Source: wiki
 2 years ago

Callisto Group TitleBest ResponseYou've already chosen the best response.4
The first one is about the probability of loss the game. The second one is about the probability of winning it. But to win it, you have a price to pay. So, you need to subtract it from the amount you get to get the net profit. I guess only.
 2 years ago

monroe17 Group TitleBest ResponseYou've already chosen the best response.1
Thank you:)
 2 years ago

Callisto Group TitleBest ResponseYou've already chosen the best response.4
Welcome. Sorry I had some other things to do and was not able to reply.
 2 years ago

monroe17 Group TitleBest ResponseYou've already chosen the best response.1
no worries!
 2 years ago
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