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The Heinrich Tire Company recalled a tire in its subcompact line in December 2 0 2 4 . Costs associated with the recall were originally

The Heinrich Tire Company recalled a tire in its subcompact line in December 2024. Costs associated with the recall were originally thought to approximate $43 million. Now, though, while management feels it is probable the company will incur substantial costs, all discussions indicate that $43 million is an excessive amount. Based on prior recalls in the industry, management has provided the following probability distribution for the potential loss:
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
\table[[Loss Amount,Probability],[$33 million,20%
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