Consider the following probability distribution of returns estimated for a proposed project that involves a new ultrasound machine;
State of the Economy Probability of Occurrence Rate of Return
Very Poor 0.10 -10.0%
Poor 0.20 0.0
Average 0.40 10.0
Good 0.20 20.0
Very Good 0.10 30.0
Question; What is the expected rate of return on the project?