Choice "C" is correct. The expected value of a decision is computed by multiplying the probability of each outcome by its value or profit. Each outcome is then added. There is a 60% probability that Dough will sell 60 of the 100 additional boxes through regular stores and that means that Dough would have a 60% chance of making a profit of $20 (60 boxes at a $1 profit ($3 − $2) sold through the regular stores and 40 boxes at a $1 loss ($1 − $2) sold through the thrift stores). There is a 40% probability that Dough will have a profit of $40 (100 boxes at a $1 profit through the regular store sales and zero boxes sold at a loss through the thrift store).

Choices "a", "d", and "b" are incorrect. The expected value of a decision is computed by multiplying the probability of each outcome by its value or profit.