Hostess Brands Is Selling Off Its Assets After Liquidation

Multiple Choice

Hostess Brands is selling off its assets after liquidation. A potential buyer for the Twinkies brand has found that the total revenue will be $3 billion a year if the brand is managed well and $1 billion a year if the brand is managed poorly. There is .6 (or 60 percent) chance of managing the brand well and a .4 (or 40 percent) chance of managing the brand poorly. What is the expected total revenue?

A) $0.4 billion
B) $1.2 billion
C) $1.8 billion
D) $2.2 billion