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Q. Jeffrey Mogul is a Hollywood film producer also he is currently evaluating a script by new screenwriter also director, Betty Jo Thurston. Jeffrey knows which the probability of a film by a new director being a success is about .10 also the probability it will flop is .90. The studio accounting department estimates which if this film is a hit; it will make $25 million in profit, whereas if it is a box office failure, it will lose $8 million. Jeffrey would like to hire noted film critic Gene Sickel to read the script also assess its chances of success. Sickel is generally able to correctly predict a successful film 70% of the time also correctly predict an unsuccessful film 80% of the time. Sickel wants a fee of $1 million. Determine if Sickel should be hired, the strategy Mogul should follow if Sicket is hired, also the expected value. Please shows all work also provide explanation?
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