CCSS IP Math III 1.6.2 Example 4

A musician has decided to create an album on her own label at a cost of $40,000. The chances of producing a successful, or profitable, album are 10%. She predicts that the profit—the money earned after accounting for the start-up cost—from a successful album would be $159,000. She is asking for your advice: do you think she should go forward with this venture?
  1. Identify the given information.
  2. Determine how to best apply the given information.
  3. Calculate the expected value of each outcome.
  4. Determine if the musician should move forward with this venture.
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