What is the excpected value for the two options

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A bridge in town is getting old. If it fails it will cost $5 million dollars to repair and will lead to $2 million dollars in lost fees from the toll-bridge. They can pay $2 million to repair and update the bridge now. If they do so, there will only be a 1% chance it fails in the next 20 years. If they don't repair and update the bridge there is a 5% chance it will fail in then next 20 years. What is the ecxpected value for the two options?

Reference no: EM131954735

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