STAT TECH IN BUSINESS & ECON AC
STAT TECH IN BUSINESS & ECON AC
18th Edition
ISBN: 9781264731657
Author: Lind
Publisher: MCG
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Chapter 20, Problem 1E
To determine

Find the expected monetary value each of the alternatives.

Give the recommended decision.

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When it is sunny, Joe's ice cream truck generates a profit of $547 per day, when it is not sunny, the profit is $250 per day, and when the truck is not out there selling ice cream, Joe loses $120 per day. Suppose 8% of a year Joe's truck is on vacation, and 86% of a year the truck is selling ice cream on sunny days, what is the expected daily profit the truck generates over a year? Enter answer as a decimal rounded to TWO digits after the decimal point.
A five-year project requires an investment of -112 and has the following cash flows in years 1 through 5, respectively (all cash flows in dollars): 48, 88, 34, 15, and 52. Find the difference between the Cauchy upper bound and the Cauchy lower bound. Write your answer as a percentage with two decimals; e.g., 23.55% but do not write the % sign. (Acceptable error = 0.50%)
The tree diagram in the shown Figure  describes the uncertain cash flows for an engineering project. The analysis period is two years, and MARR = 15% per year. Based on this information, Solve, a. What are the E(PW), V(PW), and SD(PW) of the project? b. What is the probability that PW ≥ 0?
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