Question

A businessman bought a dealership that is incurring a loss of $500,000 a year. He decided to strategize in order to turn the business around. In addition to the $500,000 annual loss, his fixed cost for running the dealership on a monthly basis is $5,000. The number of cars sold per week and their probabilities mimic the outcomes of three coins being flipped. The number of cars sold in a week was observed to be the same as the number of tails that appear in a three coin flip. See the distribution:. Number of Tails 0 |1 |2 |3. probablity 1/8 | 3/8 | 3/8 | 1/8

Answer 1

Based from the given data, the expected number of cars sold in one week is B. 1.5.

The equation to solve the problem would be like this. 0*1/8 + 1*3/8 + 2*3/8 + 3*1/8 = 3/2 which when simplified is 1.5.