Firm X is considering a project and its analysts have projected the following outcomes and their probabilities. 30% chance of Net Income being $4,600; 45% chance of Net Income being $7,800 and 25% chance of Net Income being $13,500. What is the expected value of the outcomes?

Probability is termed as the branch of mathematics that is concerned with the numerical calculations or the descriptions with a chance for the event to occur. The probability of any of the events carries the number from 0 to 1.

The expected value of outcomes is $8,265

Serial no. Probability Net Income Expected Income

1 30% $4,600 $1,380

2 45% $7,800 $3,510

3 25% $13,500 $3,375

Total 100% $8,265

The formula to calculate the expected value of the outcomes is:

[tex]\begin{aligned}\text{Expected Income} = \text{Probability} \times\text{ Net income}\end{aligned}[/tex]

To know more about the probability and the expected value of the outcomes, refer to the link below:

https://brainly.com/question/14262217