Dough Distributors has decided to increase its daily muffin purchases by 100 boxes. A box of muffins costs $2 and sells for $3 through regular stores. Any boxes not sold through regular stores are sold through Dough’s thrift store for $1. Dough assigns the following probabilities to selling additional boxes:
|
Additional sales |
Probability |
|
60 |
.6 |
|
100 |
.4 |
What is the expected value of Dough’s decision to buy 100 additional boxes of muffins?
- $28
- $40
- $52
- $68