What will be the ‘expected value’ of profit for 2020? Kindly show working on every step with formulas?

In 2020 ABC would like to consider all sorts of scenarios. There is a 15% probability that the worst will happen, a 25% probability that the best will happen, and a 60% probability that the most likely outcome will occur. What will be the ‘expected value’ of profit for 2020? Kindly show working on every step with formulas?

Possibilities	Units	Price/unit	Material cost/unit	Fixed cost
Worst	7500	18	9	50000
Most likely	9500	20	8	45000
Best	12000	22	7	40000

Expert Solution

jeff jeffy answered 2 years ago

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