1. A construction company is planning to bid on a building contract. Thebid costs $1,500 and has an 80% chance of being accepted. If accepted,the company will receive $40,000 dollars. Find the expected value.​

Answer:The expected value of construction company is $30500.Solution:Given, A construction company is planning to bid on a building contract.  The bid costs $1,500 and has an 80% chance of being accepted.  If accepted, the company will receive $40,000 dollars.  We have to find the expected value. We know that,  Expected value = probability [tex]\times[/tex] amount gained by bidding – bid amount Expected value = 80% x 40000 – 1500 Expected value = 0.8 x 40000 – 1500 Expected value = 32000 – 1500 Expected value = 30500 Hence, the expected value is $30500.