Anderson Heating and Cooling Anticipates That Cash Flows from Home

Multiple Choice

Anderson Heating and Cooling anticipates that cash flows from home heating fuel sales next year will be $800,000 if the winter is mild, $1 000,000 if winter is average and $1 500,000 if winter is exceptionally cold.The probability of an average winter is 60%, while the probability of either a mild or an exceptionally cold winter is 20%.What is Anderson's expected cash flow from fuel sales next winter?

A) $1 060,000
B) $1,100,000
C) $1,000,000
D) $1,150,000