Pregunta
An architect is considering bidding for the design of a new museum. The cost of drawing plans
and sulbmitting a model is
architect is awarded the bid, she will make
model. Complete parts a. through b. below.
a. What is the expected value in this situation?
b. Choose the statement below that best describes what this value means.
A. In the long run, the architect would expect to earn this amount.
B. In the long run, the architect would expect to lose this amount.
C. In the long run, the architect would expect to break even.
D. None of the above.
and sulbmitting a model is
architect is awarded the bid, she will make
model. Complete parts a. through b. below.
a. What is the expected value in this situation?
b. Choose the statement below that best describes what this value means.
A. In the long run, the architect would expect to earn this amount.
B. In the long run, the architect would expect to lose this amount.
C. In the long run, the architect would expect to break even.
D. None of the above.
Ask by Summers Murray. in the United States
Mar 20,2025
Solución de inteligencia artificial de Upstudy
Respuesta verificada por el tutor
Responder
The expected value is $0, meaning the architect would break even in the long run.
Solución
To solve this problem, we will calculate the expected value (EV) of the architect’s bidding situation step by step.
Step 1: Define the outcomes
-
If the architect wins the bid:
- Revenue from the bid:
- Cost of plans and model:
- Profit if awarded the bid:
- Revenue from the bid:
-
If the architect does not win the bid:
- The architect incurs the cost of plans and model:
- Profit if not awarded the bid:
- The architect incurs the cost of plans and model:
Step 2: Determine probabilities
- Probability of winning the bid:
- Probability of losing the bid:
Step 3: Calculate the expected value
The expected value (EV) can be calculated using the formula:
Substituting the values:
Now, we will perform the calculations:
-
Calculate
: -
Calculate
: -
Now, sum these results:
Final Result
The expected value is:
Part b: Interpretation of the expected value
The expected value of
C. In the long run, the architect would expect to break even.
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Simplifique esta solución The Deep Dive
To find the expected value, we consider the outcomes based on the probability of winning the bid. The profit if awarded the bid is
Now, we compute the expected value (EV):
So, the expected value is
For part b, the best statement that describes what this value means is:
C. In the long run, the architect would expect to break even.
Now let’s make this engaging!
Imagine you’re standing at the crossroads of creativity and risk in architecture! If you were to imagine this scenario as a thrilling game of chance, you’d find that the architect’s gamble is akin to rolling the dice. With a
The art of designing may be timeless, but let’s talk about strategy! If you’ve ever taken a deep dive into the world of bids, you probably know that preparing for project proposals is a tightrope walk between expenses and potential profits. The ultimate trick? Ensure you’re budgeting for those costs, but also consider enhancing your proposal with innovative flair. Sometimes, a little more creativity can tip the odds in your favor, turning a simple project into a masterpiece worthy of a museum!
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