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An Oil Company is considering two sites on which to drill described as follows:
Site A
Profit if oil is found: $200 million
Loss if no oil is found: $30 million
Probability of finding oil: 0.10
Site B
Profit if oil is found: $90 million
Loss if no oil is found: $15 million
Probability of finding oil: 0.30
Part 1: Calculate the expected profit for Site A.

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An Oil Company is considering two sites on which to drill described .pdf

  • 1. An Oil Company is considering two sites on which to drill described as follows: Site A Profit if oil is found: $200 million Loss if no oil is found: $30 million Probability of finding oil: 0.10 Site B Profit if oil is found: $90 million Loss if no oil is found: $15 million Probability of finding oil: 0.30 Part 1: Calculate the expected profit for Site A.