Question on EMV

can anyone explain the answer?

You are a project manager evaluating a decision whether to buy insurance for a temporary manufacturing facility. The likelihood of a mishap is assessed at 10% and the likely impact is evaluated at $500,000. The cost of insuring is $20,000 and has a $10,000 deductible. Would you advice buying insurance?

Yes. Because 50,000 > 21,000
Yes. Because 50,000 > 30,000
No. Because 30,000 < 500,000
No. Because 21,000 < 50,000
Explanations:

Answer (a) EMV when there is no insurance is -500,000 * 0.1 = $50,000. EMV when there is insurance is -(20,000+ 0.1*10,000) = -21,000. Therefore it makes sense to buy insurance