Keystone Brewing,Inc

Multiple Choice

Keystone Brewing,Inc.has a project that costs $1,000,000.It has a 50% chance of paying off $2,000,000 and a 50% chance of paying off $0.What is the expected payoff and the expected profit or loss from the new project?

A) The expected payoff is $1,000,000,and the expected loss is $10,000.
B) The expected payoff is $100,000,and the expected profit is $10,000.
C) The expected payoff is $100,000,and the expected loss is $100,000.
D) The expected payoff is $1,000,000,and the expected profit is $0.