Use the cost‑benefit principle to evaluate each of the given statements. Select each statement which is likely to change a manager’s decision regarding whether or not to make a new investment. Expectations of future revenues decrease such that the costs now exceed the benefits of the new investment. increase such that the benefits now exceed the costs of the new investment. decrease such that the benefits exceed the costs of the new investment. increase such that the costs still exceed the benefits of the new investment.

An insurance company estimates the probability of an earthquake in the next year to be 0.0015. the average damage done to a house by an earthquake it estimates to be $90,000. if the company offers earthquake insurance for $150, what is company`s expected value of the policy? hint: think, is it profitable for the insurance company or not? will they gain (positive expected value) or lose (negative expected value)? if the expected value is negative, remember to show "-" sign. no "+" sign needed for the positive expected value