Question

What is next year’s expected cash flow if there is a 50/50 probability that it will be either $10 million or $60 million?

Answers

  1. The next year’s expected cash flow if there is a 50/50 probability that it will be either $10 million or $60 million is $35 million.

    What is probability?

    Probability refers to possibilities. This branch of mathematics deals with the occurrence of a random event. The value’s range is 0 to 1. The probability formula states that the ratio of positive outcomes to all other outcomes determines how likely an event is to occur.
    Sum of outcomes= 410+$60=$70 million
    Number of outcomes=2
    As the probability is 50/50, the next year’s expected cash flow will be
    10+60/(2)
    =70/2
    =35 million dollars.
    To learn more about probability, visit: https://brainly.com/question/9793303
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