Reference no: EM132835504

Leah of Leah's Running Store has asked you to help her determine the expected value of the store's sales next year. The range of sales that could be generated by the store and Leah's estimated probability of the store attaining these sales are as follows:

Sales                   Estimated probability

Nil                               5%
$700,000                    10%
$900,000                        70%
$1,100,000 to $1,300,000   15%, with all outcomes in the range equally probable

Problem 1: What is the expected value of the store's sales next year?

a. $900,000
b. $865,000
c. $880,000
d. $895,000