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Honey is a technology company that provides online coupons to its subscribers. Honey's analytics staff has developed a classification method to predict whether a customer

Honey is a technology company that provides online coupons to its subscribers. Honey's analytics staff has developed a classification method to predict whether a customer who has been sent a coupon will apply the coupon toward a purchase. For a sample of customers, the following table lists the classification model's estimated coupon usage probability for a customer. For this particular campaign, suppose that when a customer uses a coupon, Honey receives $1 in revenue from the product sponsor. To target the customer with the coupon offer, Honey incurs a cost of $0.05. Honey will offer a customer a coupon as long as the expected profit of doing so is positive. Using the equation

Expected Profit of Coupon Offer = P(coupon used) Profit if coupon used + (1 - P(coupon used)) Profit if coupon not used

Customer Probability of Using Coupon
1 0.48
2 0.34
3 0.25
4 0.11
5 0.04

Determine the expected profit for each customer. Round your answers to the nearest cent. Enter negative value as negative number, if any.

Customer Expected Profit($)
1 ??
2 ??
3 ??
4 ??
5 ??

The expected profit is positive for customers *select correct answer from below*

(a. 2 & 3

b. 4 & 5

c. 1, 2, & 3

d. 3, 4, & 5

e. 1, 2, 3, & 4

f. 1, 2, 3, & 5

g. 2, 3, 4, & 5

h. 1, 2, 3, 4, & 5), so these customers (should be offered/should not be) offered the coupon.

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