Warren Lloyd is interested in leasing a new car and has contacted three automobile dealers for pricing information. Each dealer offered Warren a closed-end 36-month lease with no down payment due at the time of signing. Each lease includes a monthly charge and a mileage allowance. Additional miles receive a surcharge on a per-mile basis. The monthly lease cost, the mileage allowance, and the cost for additional miles follow: Excel File: data20-19.xls Dealer Monthly Cost Cost per Additional Mile $0.15 Forno Automative $299 $310 Mileage Allowance 36,000 45,000 54,000 Midtown Motors Hopkins Automative $0.20 $0.15 $325 Warren decided to choose the lease option that will minimize his total 36-month cost. The difficulty is that Warren is not sure how many miles he will drive over the next three years. For purposes of this decision he believes it is reasonable to assume that he will drive 12,000 miles per year, 15,000 miles per year, or 18,000 miles per year. With this assumption Warren estimated his total costs for the three lease options. For example, he figures that the Forno Automotive lease will cost him $10,764 if he drives 12,000 miles per year, $12,114 if he drives 15,000 miles per year, or $13,464 if he drives 18,000 miles per year. a. What is the decision, and what is the chance event? The decision is to choose - Select your answer - V The chance event is - Select your answer b. Construct a payoff table. Annual Miles Driven Dealer 12,000 15,000 18,000 Forno Automotive $ $ Midtown Motors $ 8 S 8 Hopkins Automotive $ $ $ c. Suppose that the probabilities that Warren drives 12,000, 15,000, and 18,000 miles per year are 0.5, 0.4, and 0.1, respectively. What dealer should Warren choose? - Select your answer - d. Suppose that after further consideration, Warren concludes that the probabilities that he will drive 12,000, 15,000 and 18,000 miles per year are 0.3, 0.4, and 0.3, respectively. What dealer should Warren select? ? - Select your answer V