A store in New Orleans makes 100 beignets every morning. The exact demand for beignets throughout the day is unknown. Let's suppose the store knows the daily demand distribution for beignets. Demand for beignets could be either 80 with probability 0.5, it could be 120 with probability 0.3, or it could be 100 with probability 0.2. The store sells whatever the demand is, and if there are leftover unsold beignets at the end of the day, the store throws them out. Each beignet is sold for $4. What is the expected revenue? Use Excel.
A store in New Orleans makes 100 beignets every morning. The exact demand for beignets throughout the day is unknown. Let's suppose the store knows the daily demand distribution for beignets. Demand for beignets could be either 80 with probability 0.5, it could be 120 with probability 0.3, or it could be 100 with probability 0.2. The store sells whatever the demand is, and if there are leftover unsold beignets at the end of the day, the store throws them out. Each beignet is sold for $4. What is the expected revenue? Use Excel.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A store in New Orleans makes 100 beignets every morning. The exact demand for beignets throughout the day
is unknown. Let's suppose the store knows the daily demand distribution for beignets. Demand for beignets
could be either 80 with probability 0.5, it could be 120 with probability 0.3, or it could be 100 with probability
0.2. The store sells whatever the demand is, and if there are leftover unsold beignets at the end of the day, the
store throws them out. Each beignet is sold for $4. What is the expected revenue? Use Excel.
O None of these
O 360
O 400
O 384
O O O
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