Reference no: EM131661301

Dr. Heinz Doofenshmirtz has just enough space and funds currently available to build either a Clownface-Inator or a platypus research lab. If he decides on the Clownface-Inator, there is a 30 percent chance of getting $120,000 in outside funding from L.O.V.E.M.U.F.F.I.N. (League of Villainous Evildoers Maniacally United For Frightening Investments in Naughtiness) next year, and an 70 percent chance of getting nothing. If the Clownface-Inator is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then Doofenshmirtz estimates the chances are 60 percent he will get $120,000 the following year, and 40 percent that he will get nothing again. If, however, the Dr. D decides to go with the platypus lab, then there is a 60 percent chance of getting $50,000 in outside funding from the American Platypus Association the first year and a 40 percent chance of getting nothing. If the platypus lab is funded the first year, Doof estimates a 60 percent chance of getting another $70,000 and a 40 percent chance of getting nothing additional the second year. If it is not funded the first year, then Doof estimates a 60 percent chance for getting $70,000 and a 40 percent chance for getting nothing in the following year. For both the Clownface-Inator and platypus research lab, no further possible funding is anticipated beyond the first two years.

What is the expected value for the decision alternative to select the Clownface-Inator?