Bob Evans(BE) operates 1000 restaurants in the US. Food contamination (e.g. E. coli) is a common risk in the food business. Whenever an outbreak of sickness due to eating food in a restaurant is reported, the restaurant has to take immediate actions. BE estimates that the probability of a reported outbreak in a restaurant on any given day is 0.00001. BE estimates that an outbreak in any one of its restaurants, results in the following costs. Cleaning and sanitation of the entire restaurant $20,000. Disposing the entire food inventory $10,000. Re-inspection of incoming food stuff $5,000. Estimate the expected total annual cost to BE from such outbreaks. BE restaurants operate 360 days in a year. $35,000 $350 $35 million 126,000 $126