An engineering consultant bids on jobs where he can make $10000 profit. If in a certain month, he has a 20% probability of getting a contract, 30% probability of getting 2 contracts, 40% probability of getting 3 contracts, and 10% probability of getting 4 contracts, what is the consultant’s expected profit for that month?
These events are are not independent. If he gets one contract, he cannot get two, etc.
If he gets one, then he has a .2 chance of getting a second one, then, if that occurs, he has a .4 chance of getting a third, ....
expected value=.2P+.2*.3* P+.2*.3*.4* P+.2*.3*.4*.1* P
= (.2+.06+.024+.0024)P
where P is 10,000
check my numbers
looks to be 10,000*.2864) check it.