An Investor Is Considering a $25,000 Investment in a Start-Up

Multiple Choice

An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.05 of a $20,000 loss, probability 0.2 of a $20,000 profit,
Probability 0.15 of a $35,000 profit, and probability 0.6 of breaking even (a profit of $0) .
What is the expected value of the profit?

A) $8250
B) $23,250
C) $10,250
D) $11,667