Question
Josie owns a small logistics company, Micro Movers. Micro Movers' revenue is $300,000 per month. The drivers who work for Josie have been involved in
Josie owns a small logistics company, Micro Movers. Micro Movers' revenue is $300,000 per month. The drivers who work for Josie have been involved in a number of accidents recently. Josie estimate that each month there is, a 7% probability that her drivers will have a large number of accidents, incurring repair bills of $180,000. a 27% probability that her drivers will have a small number of accidents, incurring repair bills of $65,000. Josie's company's net revenue (revenue less the cost of any accidents) can be modelled as a lottery. What is the expected value of this lottery? (Do not include a dollar sign in your answer.)
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