A factory equipment has an estimated service life of 4 years. However, additional research shows that there is a probability of 7% that it can have a service life ofonly 2 years and a 43% probability of lasting 9 years. Based on all this information, the expected service life of the equipment in years is nearly equal toO A. 4O B. 5O C. 6O D. 9

The concept of expected service life refers to the period during which a product or equipment is…

Answered: Based on all this information, the…

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Based on all this information, the expected service life of the equipment in years is nearly equal to

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A factory equipment has an estimated service life of 4 years. However, additional research shows that there is a probability of 7% that it can have a service life of
only 2 years and a 43% probability of lasting 9 years. Based on all this information, the expected service life of the equipment in years is nearly equal to
O A. 4
O B. 5
O C. 6
O D. 9

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