Tom wants to avoid any accidents on the work floor of his factory. if an accident does occur, it would cost him $500,000 in damages. installing safety equipment would decrease the probability of an accident occurring from 20% to 10%. however, the equipment costs $20,000 to install. 10. what is his expected loss after installing the safety equipment
a. $20,000
b. $50,000
c. $100,000
d. $125,000
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Ответ:
after all the calculations it should be about $20,000 flat rate
Ответ:
(a) the value to Shane of the option he would have chosen had Option B not been available
Explanation:
The options to this question wasn't provided. A similar question can be found here: https://www.chegg.com/homework-help/questions-and-answers/la2-maurice-receives-100-birthday-gift-deciding-spend-money-narrows-options-four-choices-o-q26490461
Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Shane's opportunity cost is the value of the option he would have chosen if he didn't choose option B.
I hope my answer helps you