Simplistic Inc

Multiple Choice

Simplistic Inc.has a project that costs $800,000.It has a 70% chance of a $1,500,000 payoff and a 30% chance of a $50,000 payoff.What is the expected payoff and the expected profit or loss from the new project?

A) The expected payoff is $1,065,000,and the expected gain is $265,000.
B) The expected payoff is $700,000,and the expected loss is $100,000.
C) The expected payoff is $600,000,and the expected gain is $0.
D) The expected payoff is $500,000,and the expected loss is $100,000.