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    Expected value for the best investment

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    A local real estate investor in Orlando is considering five alternative investments: an amusement park, a theater, a restaurant, a motel, or a gift shop. Profits from the amusement park, theater, gift shop or restaurant will be affected by the cost of gasoline; profits from the motel will be relatively stable under any condition. The following payoff table shows the profit or loss that could result from each investment.

    Determine the expected value for the best investment.

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    Solution Summary

    The expected value for the best investment is determined.