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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Expected value question on the pilot paper
My question is on combined probability percentage which said to be 18%, how did they come up with the percentage.
As the answer says, “A fall of 12% from the current level would result in a unit cost of £41.21 x 88% = £36.26.”The only results on the pay-off matrix that are less than 36.26 are those in the bottom row (where only 0.4 sq m are used) and the left hand item in the row above (0.4 sq m and 25 cuts). The probability that any of those result is: 0.08 +0.02 + 0.03 + 0.03 + 0.01 +0.10 = 0.18, or 18%
HTH
Gromit