31. Ephemeral Services Corporation (ESCO) knows that nine other companies beside
ID: 3218031 • Letter: 3
Question
31. Ephemeral Services Corporation (ESCO) knows that nine other companies besides ESCO are bidding for a $900,000 government contract. Each company has an equal chance of being awarded the contract. If ESCO has already spent $100,000 in developing its bidding proposal, what is its expected net profit? 31. Ephemeral Services Corporation (ESCO) knows that nine other companies besides ESCO are bidding for a $900,000 government contract. Each company has an equal chance of being awarded the contract. If ESCO has already spent $100,000 in developing its bidding proposal, what is its expected net profit? 31. Ephemeral Services Corporation (ESCO) knows that nine other companies besides ESCO are bidding for a $900,000 government contract. Each company has an equal chance of being awarded the contract. If ESCO has already spent $100,000 in developing its bidding proposal, what is its expected net profit?Explanation / Answer
as probabilty of getting the project =1/10 ; hence expected net profit =expected revenue-expenditure
=900000/10-100000 =-$10000
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