Posted by luis on .
An oil-drilling company knows that it costs $25,000 to sink a test well. If oil is hit, the income for the drilling company will be $375,000. If only natural gas is hit, the income will be $165,000. If nothing is hit, there will be no income. If the probability of hitting oil is 1/40 and if the probability of hitting gas is 1/20, what is the expectation for the drilling company?