A decision needs to be taken by B. M., chief engineer of Offsh Chemicals, whether to build a new processing unit, based on an experimental technology, and a net profit of $ 20 million will be realized if the new facility works and a loss of $ 10 if the facility fails. While his best guess is that there is a 40 percent chance that the new facility will work, the decision that B. M., needs to take, is to be determined. Concept Introduction: The measure of likelihood that an event will happen, in a random experiment is called probability.

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Chapter A, Problem 18P

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Interpretation: A decision needs to be taken by B. M., chief engineer of Offsh Chemicals, whether to build a new processing unit, based on an experimental technology, and a net profit of $20 million will be realized if the new facility works and a loss of $10 if the facility fails. While his best guess is that there is a 40 percent chance that the new facility will work, the decision that B. M., needs to take, is to be determined.Concept Introduction: The measure of likelihood that an event will happen, in a random experiment is called probability.

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Benjamin Moses, chief engineer of Offshore Chemicals, Inc., must decide whether to build a new processing facility based on an experimental technology. If the new facility works, the company will realize a net profit of $20 million. If the new facility fails, the company will lose $10 million. Benjamin’s best guess is that there is a 40 percent chance that the new facility will work. What decision should Benjamin Moses make?

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