Question
Jose is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 9 percent probability
Jose is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 9 percent probability that someone who walks by the machine will make a purchase from the machine, and he knows that the profit on each soft drink sold is $0.10. If Jose expects 1,402 people per day to pass by the machine and requires a complete return of his investment in one year, then what is the maximum price that he should be willing to pay for the soft drink machine? Assume 250 working days in a year and ignore taxes and the time value of money. What is Jose's expected profit from the soft drink machine? (Round answer to the nearest whole dollar, e.g. 5,275.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started