What is expected monetary value of these outcomes

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A company is considering starting a new line of business. They plan to invest $1 million in the new business. A recent graduate in Project Management has offered to do a preliminary Expected Monetary Analysis based upon possible outcomes in the first year of operation. There is a probability of .25 that net revenues will be $400,000, .05 probability of net revenues of 2 million, and .70 probability of net revenues of $300,000. What is the expected monetary value of these outcomes in the first year of operation? Should the company proceed with this investment? Explain your recommendation.

Reference no: EM132147467

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