A Retailer Is Considering Building a Large Store

Multiple Choice

A retailer is considering building a large store.If the local economy experiences expansion,the firm expects the store to earn a $2,000,000 profit next year.If the local economy experiences a contraction,the firm expects the store to lose $400,000 next year.Analysts estimate a 20% chance for the local economy to experience an expansion next year (hence an 80% chance for contraction) .What is the expected monetary value (EMV) of building the large store?

A) $1,600,000
B) $720,000
C) $2,000,000
D) $80,000
E) $1,520,000