1. Decide between Contract A and Contract B under similar circumstances to the above. Gain the factory has a fixed overhead rate of 40 million dollars.
First get the two expected values then get the standard deviations and comment accordingly!


Contract A Contract B
Profit (millions) Probability Profit (millions) Probability
25 0.3 20 0.1
50 0.1 80 0.6
75 0.1 95 0.2
120 0.5 80 0.1






2. Use expected value and standard deviation of the expected value to compare the following ventures, both with an overhead rate of $15 M. Comment briefly.

Venture A Venture B
Profit Probability of Profit Profit Probability of Profit
76 0.1 70 0.3
77 0.2 50 0.3
31 0.6 25 0.2
-6 0.1 0 0.2