Purchase Solution

This posting discusses the expected value of King, Inc.

Not what you're looking for?

Ask Custom Question

King, Inc., a sucessful Midwest firm, is considering opening a branch office on the west coast. Under normal economic conditions, with a 45% probability of occurring, King can expect to earn a net income of $50,000 per year. In a mini-recession, at 25% probability, King will earn $20,000. In a severe recession, at a 20% probability, King will lose $10,000. There is also a slight probability 10% that King will lose $300,000 if the expansion fails and the branch office must be closed. Based soely on expeced value, should King open a branch office in California?

Purchase this Solution

Solution Summary

This solution shows a detailed breakdown in excel of the results if King, Inc. opens a branch in California based on the factors given in the problem.

Purchase this Solution

Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Lean your Process

This quiz will help you understand the basic concepts of Lean.


This tests some key elements of major motivation theories.

Learning Lean

This quiz will help you understand the basic concepts of Lean.