If the probability of hitting oil is 3 and gas is 6 what is


An oil company determines it costs $25,000 to sink a test well, an oil hit yields a net revenue of $475,000($500,000 gross-$25,000costs), and a natural gas hit yields $125,000 net revenue ($150,000 gross-$25,000 costs). If the probability of hitting oil is 3% and gas is 6%, what is the expected value of sinking a test well?

Solution Preview :

Prepared by a verified Expert
Basic Statistics: If the probability of hitting oil is 3 and gas is 6 what is
Reference No:- TGS02921390

Now Priced at $10 (50% Discount)

Recommended (98%)

Rated (4.3/5)