Tom wants to avoid any accidents on the work floor of his factory. if an accident does occur, it would cost him $500,000 in damages. installing safety equipment would decrease the probability of an accident occurring from 20% to 10%. however, the equipment costs $20,000 to install. 10. what is his expected loss after installing the safety equipment
a. $20,000
b. $50,000
c. $100,000
d. $125,000
Answers: 3
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