What is the expected value of this contract

Assignment Help Business Management

Reference no: EM133396190

Question: The EZ Construction Company is offered a $40,000 contract to build a new deck for a house. The company's profit if it does not have to sink piers (vertical supports) down to bedrock will be $9,000. However, it does have to sink the piers, it will lose $2,000. The probability to put in the piers is 20%. What is the expected value of this contract? Now, EZ learns that it can obtain a seismic study 0f the property that would specify whether piers have to be sunk before EZ must accept or reject this contract. By how much would the seismic study increase EZ's expected value? What is the most that it will pay for such a study?

Reference no: EM133396190

Questions Cloud

Identify how you would use budget data to reduce costs : Identify how you would use budget data to reduce costs and improve operational performance. Please include at least 2 scholarly peer reviewed references

What steps would you take to prevent a similar attack : what you have read in the text and other sources throughout the course, what steps would you take to prevent a similar attack and/or limit its damage

Should mona be able to terminate her pregnancy without : Should Mona be able to terminate her pregnancy without parental consent? Is the law ethically just?

Compute the savings-investment ratio : The lifetime of the project will be 10 years with a cashflow stream of 2,000 per year and an interest rate of 6.77. Compute the Savings/Investment ratio.

What is the expected value of this contract : What is the expected value of this contract? Now, EZ learns that it can obtain a seismic study 0f the property that would specify whether piers have to be sunk

Description of pain theories, description of types of pain : Description of pain theories, description of types of pain, and treatment methods used for each type of pain

Discuss the moral, ethical, and legal issues : Discuss the moral, ethical, and legal issues that organizations face when dealing with internal and external threats (like cybercrime) organizations must face.

Discusses that he is feeling abnormally tired : discusses that he is feeling abnormally tired. Tony's lab work shows that his iron levels are low. Assign the correct code(s) to the visit. And do we need

Explain why administrative leadership, policy : Which of the following course concepts you are most interested in addressing in class and explain why: administrative leadership, policy and legislation

User Account

All Pages