A construction company is planning to bid on a building contract. The bid costs the company...
A construction company is planning to bid on a building contract. The bid costs the company
$1100.
The probability that the bid is accepted is
one tenth.
If the bid is accepted, the company will make
$66,000
minus the cost of the bid.
a. What is the expected value in this situation?
(Round to the nearest dollar.)
b. Choose the statement below that best describes what this value means.
A.
In the long run, the construction company would expect to lose this amount on average per bid.
B.
In the long run, the construction company would expect to earn this amount on average per bid.
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