Expected value

1)

2)

3)

A construction company is considering submitting bids for two contracts. It will cost the company
‍$10,000 to prepare and submit the bids, and if won, each bid would produce $50,000 of income to
the company. The company estimates that it has a 10% chance of winning any given bid.

Here is the probability distribution of X = the number of bids the company wins, and M = the amount
of money the company profits from the bids.

X = the number of bids won

                                                                           0

                                                                                                   1

                                                                                                    2

M = profit




Probability





Calculate the mean of M.

4)

5)