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?

  1. $28
  2. $40
  3. $52
  4. $68