A store specializing in mountain bikes is to open in one of two malls. If the first mall is selected, the store anticipates a yearly profit of $825,000 if successful and a yearly loss of $275,000 otherwise. The probability of success is 1/2. If the second mall is selected, it is estimated that the yearly profit will be $550,000 if successful; otherwise, the annual loss will be $165,000. The probability of success at the second mall is 3/4. What is the expected profit for both mall 1 and 2? Which mall should be chosen in order to maximize the expected profit?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
A store specializing in mountain bikes is to open in one of two malls. If the first mall is selected, the store anticipates a yearly profit of $825,000 if successful and a yearly loss of $275,000 otherwise. The
What is the expected profit for both mall 1 and 2? Which mall should be chosen in order to maximize the expected profit?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
