Reference no: EM133132359

Question - Queens Engineering, Inc., a successful Atlantic firm, is considering opening a branch office on the west coast. Under normal economic conditions, with a 50% probability of occurring, Queens can expect to earn a net income of $60,000 per year. In a mini-recession, at a 25% probability, Queens will earn $40,000. In a severe recession, at a 15% probability, Queens will lose $20,000. There is also a slight probability (10%) that it will lose $300,000 if the expansion fails and the branch office must be closed. Should Queens open a branch office on the West Coast? Answer with proper calculation.