Jeff, a sales manager of a car dealership, believes that his sales force sells a car to 35%

of the customers who stop by the showroom. He needs the dealership to make 55

sales this month to get a special bonus of $170,000. Approximately 120 customers visit the showroom each month. You may assume that the customers entering the dealership are independent of one another. Complete parts a through f below.

c) Assume that Jeff can choose to either increase the motivation of his sales force so that they increase the probability of a sale to 40%, or to increase the number of people walking into the showroom to 140. Which makes it more likely that Jeff will sell 55 cars? d) A marketing consultant suggests that she can produce an ad campaign that will increase the number of people walking into the showroom to 140

at a cost of $25,000. Assuming that Jeff is risk-neutral and has the budget, should Jeff accept the offer?

e) What is the maximum amount that Jeff should be willing to pay to increase the number of people entering the showroom to 140 (assuming that he is risk-neutral and perfectly rational)?