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ooo T-Mobile 4G 5:30 AM New Project. There are multifie op he-CuS +\"ce the b.td

ID: 1212393 • Letter: O

Question

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Explanation / Answer

The expected capital investment for machinery of long building = 0.4*400000+0.3*500000+0.2*600000+0.1*700000 = $500,000

The expected capital investment for long building = $500,000 + $100,000 = $600,000

So the expected cost of investment for long building is 600000 which has 75% chance

The expected capital investment for small building = $40,000 + $100,000 = $140,000

So the expected cost of investment for small building is 140000 which has 25% chance

So Expected Capital Investment Cost of Project = 600000*.75+140000*.25 = $485,000