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keebler01
 3 years ago
The property restoration company PuroServ is considering switching to new dehumidifiers. Their market research, considering the cost of the new machines and their efficiency, tells them that the switch would give them a 75% chance of making a $20,000 profit, a 20% chance of breaking even, and a 5% chance of losing $5,000. How much money does PuroServ expect to make with their new purchase?
please show work
keebler01
 3 years ago
The property restoration company PuroServ is considering switching to new dehumidifiers. Their market research, considering the cost of the new machines and their efficiency, tells them that the switch would give them a 75% chance of making a $20,000 profit, a 20% chance of breaking even, and a 5% chance of losing $5,000. How much money does PuroServ expect to make with their new purchase? please show work

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Ishaan94
 3 years ago
Best ResponseYou've already chosen the best response.1keebler I am sorry but I never did a question like this. I will try to get some help.

dumbcow
 3 years ago
Best ResponseYou've already chosen the best response.3its expected value, kind of like a weighted average \[EV = \sum_{}^{}x*p(x)\] where x is profit made and p(x) is the probability of making that profit

keebler01
 3 years ago
Best ResponseYou've already chosen the best response.0dumbcow i dont get it!!

dumbcow
 3 years ago
Best ResponseYou've already chosen the best response.3so (20,000)(0.75) + (0)(0.2) + (5000)(0.05)

dumbcow
 3 years ago
Best ResponseYou've already chosen the best response.3multiply each probability by its corresponding profit

dumbcow
 3 years ago
Best ResponseYou've already chosen the best response.3no problem what do you get after adding them up

keebler01
 3 years ago
Best ResponseYou've already chosen the best response.0it gave me a wired number!

dumbcow
 3 years ago
Best ResponseYou've already chosen the best response.3hmm should be 14,750 .75*20,000  .05*5000
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