Question

A contractor buys homes, renovates them, and tries to sell them for a profit. For a recent project, there is a 0.61 probability of a $7,000 profit, a 0.30 probability of a $10,000 loss, and a 0.09 probability that the contractor breaks even. What is the expected profit for projects with this probability distribution?

Answer 1

SOLUTION:

Step 1:

In this question, we are given the following:

Step 2;

The details of the solution are as follows:

CONCLUSION:

The final answer is:

$1270\text{ dollars}$