I JUST NEED ANSWER FOR PART C Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property, it can then be sold for $154,000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100,000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100,000 and $144,000. (a) What is the estimate of the probability Strassel will be able to obtain the property using a bid of $124,000? (Use at least 5,000 trials. Round your answer three decimal places.) (b) How much does Strassel need to bid to be assured of obtaining the property? $124,000$134,000 $144,000 (c) Use the simulation model to compute the profit for each trial of the simulation run (noting that Strassel's profit is $0 if he does not win the bid). With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $124,000, $134,000, or $144,000. What is the expected profit (in dollars) for each bid alternative? (Use at least 5,000 trials. Round your answers to the nearest dollar.) expected profit for a bid of $124,000$?? CORRECT ANSWER IS 9054 expected profit for a bid of $134,000$ ?? 6036 IS WRONG expected profit for a bid of $144,000$ ? 3018 IS WRONG

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter2: Systems Of Linear Equations

Section2.4: Applications

Problem 26EQ

See similar textbooks

Related questions

Question

I JUST NEED ANSWER FOR PART C

Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property, it can then be sold for $154,000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100,000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100,000 and $144,000.

(a)

What is the estimate of the probability Strassel will be able to obtain the property using a bid of $124,000? (Use at least 5,000 trials. Round your answer three decimal places.)

(b)

How much does Strassel need to bid to be assured of obtaining the property?

$124,000$134,000 $144,000

(c)

Use the simulation model to compute the profit for each trial of the simulation run (noting that Strassel's profit is $0 if he does not win the bid). With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $124,000, $134,000, or $144,000. What is the expected profit (in dollars) for each bid alternative? (Use at least 5,000 trials. Round your answers to the nearest dollar.)

expected profit for a bid of $124,000$?? CORRECT ANSWER IS 9054

expected profit for a bid of $134,000$ ?? 6036 IS WRONG

expected profit for a bid of $144,000$ ? 3018 IS WRONG

Expert Solution

Step by step

Solved in 5 steps with 16 images

SEE SOLUTION Check out a sample Q&A here