Question

a construction company is considering submitting bids for two contracts. it will cost the company $10,000 to prepare and submit the bids, and if won, each bid would produce $50,000 of income to the company. the company estimates that it has a 10% chance of winning any given bid.
here is the probability distribution of ( x ) = the number of bids the company wins, and ( m ) = the amount of money the company profits from the bids.

calculate the mean of ( m ).
( mu_m=) dollars
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Explanation:

Step1: Recall the formula for the mean of a discrete random variable

The mean formula is $\mu_M=\sum(M\times P(M))$.

Step2: Calculate each term in the sum

For $M = - 10000$ and $P(M)=0.81$: $(-10000)\times0.81=-8100$.
For $M = 40000$ and $P(M)=0.18$: $40000\times0.18 = 7200$.
For $M = 90000$ and $P(M)=0.01$: $90000\times0.01=900$.

Step3: Sum up the terms

$\mu_M=-8100 + 7200+900$.

Answer:

$0$