Entrepreneur Vernon Bell would like to determine whether it would be profitable to establish a gardening service in a local suburb. Vernon believes there are four possible levels of demand for the gardening service:

• Very low demand1% of households would use the service; Vernon would lose $100,000.
• Low demand5% of households would use the service; Vernon would earn $10,000.
• Moderate demand10% of households would use the service; Vernon would earn $25,000.
• High demand25% of households would use the service; Vernon would earn $75,000.

Based on past experiences in other suburbs, Vernon assigns the following probabilities to the various demand levels:

P(very low demand)	= 0.20
P(low demand)	= 0.50
P(moderate demand)	= 0.20
P(high demand)	= 0.10

Vernon decides that prior to making a final decision, he should take a survey of the households in this suburb to determine demand for the gardening service. If a random sample of 20 households is selected and 3 would use this gardening service, revise the prior probabilities in light of this sample information.

(Hint: Use the binomial distribution to determine the probability of the outcome that occurred given a particular level of demand.)

What is the revised probability of very low demand? (Enter your answer in the format x.xxxx.)

What is the revised probability of low demand? (Enter your answer in the format x.xxxx.)

What is the revised probability of moderate demand? (Enter your answer in the format x.xxxx.)

What is the revised probability of high demand? (Enter your answer in the format x.xxxx.)

What is the revised expected value of offering the service? (Enter your answer in the format xx or $xx.xx.)

What is the revised expected value of perfect information? (Enter your answer in the format xxx or $xxx.xx.)