A company has an opportunity to bid on three contracts. Determine which would be the best investment given the information in the table below.Probability of Profit and Loss by ContractContractProfit, Probability of ProfitProbability to Break EvenLoss, Probability of LossSoutheast$45,000, 50%30%$6,000, 20%Southwest$60,000, 35%40%$10,000, 25%California$112,000, 20%40%$40,000, 40%

Calculate each contract’s expected value by multiplying each outcome by its probability and adding the results, treating breaking even as $0. Southeast: (0.50 × $45,000) + (0.30 × $0) + (0.20 × −$6,000) = $21,300. Southwest is $18,500, and California is $6,400, so Southeast has the highest expected value and is the best investment.

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