Buchanan Corp. forecasts the following payoff from a project:
Outcome Probability of Outcome Assumptions
$1,000 50% Pessimistic
$3,000 60% Moderately successful
$6,000 50% Optimistic
What is the expected value of the outcomes?
a) $3,000
b) $3,333
d) The forecast is incorrect and must be modified before finding the expected value.