An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.05 of a $15,000 loss, probability 0.15 of a $20,000 loss, probability 0.35 of a $35,000 profit, and probability 0.45 of breaking even (a profit of $0). What is the expected value of the profit?
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The expected value of the profit is $8500 profit.