Phil Dunphy, a real estate agent, is considering whether he should list an unusual $850,000 house for sale. If he lists it, he will need to spend $3,400 in advertising, staging, and fresh cookies. The current owner has given Phil 6 months to sell the house. If he sells it, he will receive a commission of $19,000. If he is unable to sell the house, he will lose the listing and his expenses. Phil estimates the probability of selling this house in 6 months to be 61%. What is the expected profit on this listing?
E= 19000(.61) + (-3400)(.39) ≈ 3.8636
I got this wrong on my quiz but I'm not sure what I did wrong exactly.
E= 19000(.61) + (-3400)(.39) ≈ 3.8636
I got this wrong on my quiz but I'm not sure what I did wrong exactly.