Answer:
$ 320,000
Explanation:
The expected profit of the jewelery can be calculated by Hope, a statistical concept that consists of the sum of the product of each probability of exit of the experience by its respective value.
Thus, the expected profit of the jewelry store will be: $ 320,000
Hope [(0.4) x 400,000 + (0.3) x 300,000 + (0.2) x100,000 + (0.1) x 500,000)] = 160,000 + 90,000 + 20,000 + 50,000 = $ 320,000
The expected profit of the jewelry store during the next year is $320,000.
Suppose that next year the U.S. will be in one of the following economic conditions: Boom, Moderate Growth, Recession, or Depression. The probability that each economic condition will occur, and that a jewelry store will earn profits within that broader economic condition are listed below:
Economic Condition, Probability, Store Profits
The expected value of a discrete random variable is the average of all possible values weighted by the probability of each outcome
A discrete random variable takes a finite set of possible values. For example, flipping a fair coin produces only two possible outcomes.
The expected profit for the store is sum of expected profit in each economic condition.
[tex] = (0.4* 400,000.00)+ (0.3* 300,000.00) + (0.2*100,000.00) + (0.1*500,000.00) = $22,000 [/tex]
Therefore the expected profit of the jewelry store during the next year is $320,000.
Grade: 9
Subject: business
Chapter: economic conditions
Keywords: Boom, Moderate Growth, Recession, Depression, The expected profit
