4 Claire is considering investing in a new business In the first year there is...
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4 Claire is considering investing in a new business In the first year there is a probability of 0 2 that the new business will lose 10 000 a probability of 0 4 that the new business will break even 0 loss or gain a probability of 0 3 that the new business will make 5 000 in profits and a probability of 0 1 that the new business will make 8 000 in profits a Claire should invest in the company if she makes a profit Should she invest Explain using expected values b If Claire s initial investment is 1 200 and the expected value for the new business stays constant how many years will it take for her to earn back her initial investment
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