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Answer to Question #274137 in Civil and Environmental Engineering for Jsjsbs

Question #274137

Annual savings due to an energy efficiency project have a most likely value of $30,000. The high estimate of$40,000 has a probability of 0.2, and the low estimate of $20,000 has a probability of 0.30. What is the expected value for the annual savings? 1 Expert's answer 2021-12-03T15:18:02-0500 The high estimate of$40,000 has a probability of 0.25, and the low estimate of $20,000 has a probability of .35. Thus, the estimate of$30,000 has the probability of (1-0.25-0.35)=0.40.

Now, the expected value for the annual savings is the weighted average of the annual savings.

Hence,

the expected value for the annual savings = 0.40×30000+0.25×40000+0.35×20000 = 29000

Therefore, the expected value for the annual savings is \$29000.

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