[challenge mather]

Under normal economic conditions, with a 45% probability of occurring, King can expect to earn a net income of $50,000 per year. In a mini-recession, at 25% probability, King will earn $20,000. In a severe recession, at a 20% probability, King will lose $10,000. There is also a slight probability (10%) that King will lose $300,000 if the expansion fails and the branch office must be closed.
Should King open a branch office in California?

The answer to me seems there is a high degree of risk and loss if he opens a new office from $50 grand to $300. Is this more an opinion?

[DRIVEMAN]

The exposed value of this risk is going to be -4.5 grands (.45*50 + .25*20 - .2*10 - .1 * 300). Hence going by probability, he should not open the store!