Answer Happy

Question 1 (10 marks) (a) The manager of a construction company will choose between project A and project B. He estimates that the project A will yield a profit of $360,000 with a probability of 30% or a profit of $94,000 with a probability of 70%; the project B will yield a profit of $28,000 with a probability of 40% or a profit of $270,000 with a probability of 60%. Which project should the manager choose? Why? (6 marks) a (b) The following table gives the number employed by each group of employees and the average salary for the groups. Calculate the weighted aggregate price index for year 2021 using year 2020 employment pattern. Interpret your answer in your own words. (4 marks) Group 2020 2021 of Employees Average No. Employed Average Salary ($000s) Salary ($000s) No. Employed A 100 70 75 110 B 260 40 230 50 C 330 25 320 25 D 780 10 740 8