Multiple Choice
Top Cat Ventures, Inc., explores for natural gas. The company is considering a particular drilling site with a geological structure that has a 65% probability of yielding enough natural gas to produce revenue of $2 million. The probability is 35% that the site will yield zero revenue and result in a loss of $500,000. What is the expected value of drilling at this site?
A) $1.125 million
B) $1.6 million
C) A $500,000 loss
D) $1.5 million
Correct Answer:
Verified
Correct Answer:
Verified
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