A business executive is trying to decide whether to undertake one of two contracts or neither
one. He has simplified the situation somewhat and feels that it is sufficient to imagine that the contracts provide alternatives as given in Table P12.22.
CONTRACT A CONTRACT B
NPW probability NPW probability
$100,000 0.2 $40,000 0.3
50,000 0.4 10,000 0.4
0 0.4 -10,000 0.3
one. He has simplified the situation somewhat and feels that it is sufficient to imagine that the contracts provide alternatives as given in Table P12.22.
CONTRACT A CONTRACT B
NPW probability NPW probability
$100,000 0.2 $40,000 0.3
50,000 0.4 10,000 0.4
0 0.4 -10,000 0.3