Problem:
Austin Electronics expects sales next year to be $1,080,000 if the economy is strong, $740,000 if the economy is steady, and $393,000 if the economy is weak. The firm believes there is a 25 percent probability the economy will be strong, a 45 percent probability of a steady economy, and a 30 percent probability of a weak economy.
Required:
Question: What is the expected level of sales for next year?
Note: Please show how you came up with the solution.