An oil company is considering 2 sites on which to drill, described as follows:

Site A: profit of oil is found: $60 million

Loss if no oil is found: $5 million

Probability of finding oil: 0.2

Site B: profit of oil is found: $90 million

Loss of no oil is found: 0.1

A: Which site has the larger expected profit?

B: if the expected profit for both sites is not the same, by how much is the expected profit larger?

Question

24 December, 21:59

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Answers (1)

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Lucas Harmon · Answer 1

A) site A has a larger probablility of finding oil

B) the difference between amount of profitmade is 30 million.