The financial success of the Downhill Ski Resort in the Blue Ridge Mountains is dependent on 2 the amount of snowfall during the winter months. If the snowfall averages more than 40 inches 3 the resort will be successful; if the snowfall is between 20 and 40 inches, the resort will receive 4 a moderate financial return; and if snowfall averages less than 20 inches, the resort will suffer a 5 financial loss. The financial return and probability, given each level of snowfall, follow: Snowfall Level (in.) Financial return
> 40.4 $120,000
20-40, 0.2 40,000
< 20, 0.4 -40,000

Required:
A large hotel chain has offered to lease the resort for the winter for $40.000. Compute the expected value to determine whether the resort should operate or lease. Explain your answer.