Enter the expected monetary value of preferred option

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Reference no: EM132008900

Jay, a writer of novels, just has completed a new thriller novel. A movie company and a TV network both want exclusive rights to market his new title. If he signs with the network, he will receive a single lump sum of $1,370,000, but if he signs with the movie company, the amount he will receive depends on how successful the movie is at the box office. The probability of a small box office earning $258,000 is 0.27. The probability of a medium box office of $1,390,000 is 0.62, and the probability of a large box office of $3,070,000 is 0.11. Assume that Jay wants to maximize his expected monetary value. Enter the expected monetary value (EMV) of the preferred option.

Reference no: EM132008900

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