You Are a Hotel Manager Considering Four Projects That Yield

Multiple Choice

You are a hotel manager considering four projects that yield different payoffs,depending upon whether there is an economic boom or a recession.The potential payoffs and corresponding payoffs are summarized in the following table. $$\begin{array} { | l | l | l | } \hline \text { Praject } & \begin{array} { l } \text { Bamn } \\( 50 \% ) \end{array} & \begin{array} { l } \text { Recession } \\( 50 \% ) \end{array} \\\hline \text { A } & \$ 40 & - \$ 20 \\\hline \text { B } & - \$ 10 & \$ 30 \\\hline \text { C } & \$ 50 & - \$ 50 \\\hline \text { D } & \$ 60 & \$ 60 \\\hline\end{array}$$ The expected value of project A is:

A) $5.
B) $10.
C) $20.
D) None of the answers are correct.