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To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3,400, and the average first-year commission for each new account opened is $4,900. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that individual will open a new account. (a) Determine the equation for computing Gustin's profit per seminar, given values of the relevant parameters. Profit (3,400 x 4,900) New Accounts Opened Profit (New Accounts Opened x 4,900) - 3,400 O Profit New Accounts Opened(4,900 x 3,400) O Profit = 4,900 - (New Accounts Opened x 3,400) Profit = (New Accounts Opened x 3,400) - 4,900 (b) What type of random variable is the number of new accounts opened? Hint: Review Appendix 12.1 for descriptions of various types of probability distributions. Odiscrete uniform O continuous O integer uniform binomial O normal (c) Construct a spreadsheet simulation model to analyze the profitability of Gustin's seminars. Would you recommend that Gustin continue running the seminars? (Use at least 1,000 trials. Round your expected profit to the nearest integer and your probability of a loss to three decimal places.) expected profit probability of a loss Gustin should consider discontinuing the seminars in their current format. (d) What is the minimum number of attendees (in a multiple of five, i.e., 25, 30, 35, etc.) that Gustin needs so that the seminar's average profit is greater than zero? 70 attendees

To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3,400, and the average first-year commission for each new account opened is $4,900. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that individual will open a new account. (a) Determine the equation for computing Gustin's profit per seminar, given values of the relevant parameters. Profit (3,400 x 4,900) New Accounts Opened Profit (New Accounts Opened x 4,900) - 3,400 O Profit New Accounts Opened(4,900 x 3,400) O Profit = 4,900 - (New Accounts Opened x 3,400) Profit = (New Accounts Opened x 3,400) - 4,900 (b) What type of random variable is the number of new accounts opened? Hint: Review Appendix 12.1 for descriptions of various types of probability distributions. Odiscrete uniform O continuous O integer uniform binomial O normal (c) Construct a spreadsheet simulation model to analyze the profitability of Gustin's seminars. Would you recommend that Gustin continue running the seminars? (Use at least 1,000 trials. Round your expected profit to the nearest integer and your probability of a loss to three decimal places.) expected profit probability of a loss Gustin should consider discontinuing the seminars in their current format. (d) What is the minimum number of attendees (in a multiple of five, i.e., 25, 30, 35, etc.) that Gustin needs so that the seminar's average profit is greater than zero? 70 attendees

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
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To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3,400, and the average first-year commission for each new account opened is $4,900. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that individual will open a new account. (a) Determine the equation for computing Gustin's profit per seminar, given values of the relevant parameters. Profit (3,400 x 4,900) New Accounts Opened Profit (New Accounts Opened x 4,900) - 3,400 O Profit New Accounts Opened(4,900 x 3,400) O Profit = 4,900 - (New Accounts Opened x 3,400) Profit = (New Accounts Opened x 3,400) - 4,900 (b) What type of random variable is the number of new accounts opened? Hint: Review Appendix 12.1 for descriptions of various types of probability distributions. Odiscrete uniform O continuous O integer uniform binomial O normal (c) Construct a spreadsheet simulation model to analyze the profitability of Gustin's seminars. Would you recommend that Gustin continue running the seminars? (Use at least 1,000 trials. Round your expected profit to the nearest integer and your probability of a loss to three decimal places.) expected profit probability of a loss Gustin should consider discontinuing the seminars in their current format. (d) What is the minimum number of attendees (in a multiple of five, i.e., 25, 30, 35, etc.) that Gustin needs so that the seminar's average profit is greater than zero? 70 attendees
Transcribed Image Text:To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3,400, and the average first-year commission for each new account opened is $4,900. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that individual will open a new account. (a) Determine the equation for computing Gustin's profit per seminar, given values of the relevant parameters. Profit (3,400 x 4,900) New Accounts Opened Profit (New Accounts Opened x 4,900) - 3,400 O Profit New Accounts Opened(4,900 x 3,400) O Profit = 4,900 - (New Accounts Opened x 3,400) Profit = (New Accounts Opened x 3,400) - 4,900 (b) What type of random variable is the number of new accounts opened? Hint: Review Appendix 12.1 for descriptions of various types of probability distributions. Odiscrete uniform O continuous O integer uniform binomial O normal (c) Construct a spreadsheet simulation model to analyze the profitability of Gustin's seminars. Would you recommend that Gustin continue running the seminars? (Use at least 1,000 trials. Round your expected profit to the nearest integer and your probability of a loss to three decimal places.) expected profit probability of a loss Gustin should consider discontinuing the seminars in their current format. (d) What is the minimum number of attendees (in a multiple of five, i.e., 25, 30, 35, etc.) that Gustin needs so that the seminar's average profit is greater than zero? 70 attendees
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