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#1 2012-07-16 13:56:15
- Portia Moore - Hawkins
- Guest
Can you help me set up this problem?
The drilling cost is uncertain and will either be $40,000 with a probability of .2, $ 50,000 with a probability of .7 or $70, 000 with a probability of .1
Thank you so much!
#2 2012-07-16 15:12:55
- bobbym
- bumpkin
- From: Bumpkinland
- Registered: 2009-04-12
- Posts: 109,606
Re: Can you help me set up this problem?
Hi Portia Moore - Hawkins;
Welcome. Do you want the expected value of the drilling costs? If so:
So the expected cost will be $ 50000.
In mathematics, you don't understand things. You just get used to them.
If it ain't broke, fix it until it is.
Always satisfy the Prime Directive of getting the right answer above all else.
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