An oil-drilling company knows that it costs $28,000 to sink a test well. If oil is hit, the income for the dri?

An oil-drilling company knows that it costs ,000 to sink a test well. If oil is hit, the income for the drilling company will be 5,000. If only natural gas is hit, the income will be 5,000. If nothing is hit, there will be no income. If the probability of hitting oil is and if the probability of hitting gas is , what is the expectation for the drilling company?

4 Responses to “An oil-drilling company knows that it costs $28,000 to sink a test well. If oil is hit, the income for the dri?”

  1. wayne Says:

    It matters not what the probabilities are.

    The expectation for the drilling company is that green people will protest the drilling, costing $87,000 for increased security on the site, "earth first" environmental terrorists will do $400,000 in damages to the equipment, federal regulations will add $300,000 (and 6 months) to the cost, and EPA violations (real or imagined) will cost an additional $673,998.63 in fines and cleanup fees.

  2. qѣπ Says:

    What’s the probability?

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