A skilled custom auto mechanic finds an old beat up Chevy Camaro in a junk yard, and pays$300 for it. She spends $19, 000 fixing and customizing the vehicle, knowing that there is a0.7 probability that she can sell the customized car for $30, 000 and a 0.3 probability thatshe can sell the car for $40, 000. What is the expected profit from her total investment in thecar? (Select the most accurate option from below).

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Answered: A skilled custom auto mechanic finds an…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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The college student senate is sponsoring a spring break Caribbean cruise raffle. The proceeds are to be donated to the Samaritan Center for the Homeless. A local travel agency donated the cruise, valued at $2000. The students sold 2374 raffle tickets at $5 per ticket. Kevin bought thirty-four tickets. What is the probability that Kevin will win the spring break cruise to the Caribbean? (Round your answer to five decimal places.)What is the probability that Kevin will not win the cruise? (Round your answer to five decimal places.) Expected earnings can be found by multiplying the value of the cruise by the probability that Kevin will win. What are Kevin's expected earnings? (Round your answer to two decimal places.)$ Is this more or less than the amount Kevin paid for the thirty-four tickets? How much did Kevin effectively contribute to the Samaritan Center for the Homeless? (Round your answer to two decimal places.)$
The proprietor of Midland Construction Company has to decide between two projects. He estimates that the first project will yield a profit of $180,000 with a probability of 0.7 or a profit of $130,000 with a probability of 0.3; the second project will yield a profit of $220,000 with a probability of 0.7 or a profit of $80,000 with a probability of 0.3.Find the expected profit for each project. first project $ second project $
Oxnard petri Ltd is buying hurricane insurance for it's off-coast drilling platform. During the next five years, the probability of total loss of only the above-water superstructure ($250 million) is .25, the probability of total loss of the facility ($950 million) is.25, and the probability of no loss is.50. Find the expected loss.( Input the amount as a positive value.) Expected Loss is what?
You purchase a brand new car for $15,000 and insure it. The policy pays 78% of the car's value if there is an issue with the engine or 30% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.009, and the probability there is an issue with the speaker system is 0.02. The premium for the policy is p. Let X be the insurance company's net gain from this policy. (a) Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. P(X) (b) Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent
Bob, the proprietor of Midway Lumber, bases his projections for the annual revenues of the company on the performance of the housing market. He rates the performance of the market as very strong, strong, normal, weak, or very weak. For the next year, Bob estimates that the probabilities for these outcomes are 0.15, 0.25, 0.39, 0.09, and 0.12, respectively. He also thinks that the revenues corresponding to these outcomes are $23, $18.6, $16.9, $14, and $6 million, respectively. What is Bob's expected revenue for next year?
The proprietor of Midland Construction Company has to decide between two projects. He estimates that the first project will yield a profit of $160,000 with a probability of 0.7 or a profit of $120,000 with a probability of 0.3; the second project will yield a profit of $220,000 with a probability of 0.6 or a profit of $70,000 with a probability of 0.4.Find the expected profit for each project. first project $ second project $ Which project should the proprietor choose if he wants to maximize his expected profit? first project second project
Suppose an oil company is thinking of buying some land for $10,000,000. There is a 60%60% chance of economic growth and a 40%40% chance of recession. The probability of discovering oil is 44%44% when there is economic growth and 32%32% when there is a recession. If there is economic growth and the oil company discovers oil, the value of the land will triple. If they do not discover oil, the value of the land will decrease by 10%.10%. If there is a recession and the company discovers oil, the value of the land will increase by 50%.50%. If they do not discover oil, the land will decrease in value by 75%.75%. What is the expected value of the investment? Give your answer to the nearest dollar. Avoid rounding within calculations. $$ Select the correct interpretation of the expected value. The expected value represents what the actual investment value will be for this land purchase of $10,000,000. The company should make the investment because the expected value…
Two new product designs are to be compared on the basis of revenue potential. Marketing feels that the revenue from design A can be predicted quite accurately to be $3 million. The revenue potential of design B is more difficult to access. Marketing concludes that there is a probability of 0.3 that the revenue from design B will be $7 million, but there is a 0.7 probability that the revenue will be only $2 million. Which design do you prefer?
It is the beginning of September and you have been offered the following deal to go heli-skiing. If you pick the first week in January and pay for your vacation now, you can get a week of heli-skiing for $2,900. However, if you cannot ski because the helicopters cannot fly due to bad weather, there is no snow, or you get sick, you do not get a refund. There is a 30% probability that you will not be able to ski. If you wait until the last minute and go only if you know that the conditions are perfect and you are well, the vacation will cost you $4,600. You estimate that the pleasure you get from heli-skiing is worth $6,700 per week to you (if you had to pay more than that, you would choose not to go). If your cost of capital is 11% per year, should you book ahead or wait? You should because the NPV of this choice is $ book ahead wait (Round to two decimal places.)
Friskie is having her fifth litter. The prior litters have either been three normal pups or two normal pups and a runt. Assume the probability of either outcome is 50%.
Vivian is deciding whether or not to prepare a tender for a job. The cost of producing the tender will be $1600, which will apply even if her company does not win the tender. Vivian has done some quick calculations and currently thinks that there is a 0.57 probability that the cost is $7000, and otherwise the cost is $10400. These costs do not include the cost of producing the tender. She also believes that the probability that the lowest bid submitted by any competing company will be $8800 is 0.35, that the probability that the lowest bid submitted by any competing company will be $16400 is 0.32, and otherwise that the lowest bid submitted by any competing company will be $12400 Vivian is considering whether she should bid $10800, bid $14400, or not bid. You may assume independence between the probabilities that Vivian assigns to her estimated costs of the project and the probabilities of her assumed lowest bids of competing companies. Thus if She submits a price of $14400 then the…
A realtor who takes the listing on a house to be sold knows that she will spend $800 trying to sell the house. If she sells it herself, she will earn 6% of the selling price. If another realtor sells a house from her list, the first realtor will earn only 3% of the price. If the house remains unsold after 6 months, she will lose the listing. Suppose that probabilities are as follows: Event Probability Sells the house alone 0.50 Sells through another agent 0.40 Does not sell in 6 months 0.10 What is the expected profit from listing a $185,000 house?

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