Question

A produceer plans an outdoor regatta for April 28th. The cost of the regatta is $9,000. This includes advertising, security, printing tickets, entertainment, etc. The producer plans to make $15,000 profit if all goes well. However, it it rains, the regatta will be cancelled. According tothe weather report, the probability of rain is 0.35. Find the producer's expected profit.

Answer 1

expected profit = $6600

Step-by-step explanation:

given data

cost of the regatta = $9,000

profit = $15,000

probability of rain = 0.35

to find out

the producer's expected profit

solution

we know that expected profit is express as

expected profit = profit if no rain - loss if rain ..................1

put here value as here

expected profit = profit if no rain - loss if rain

expected profit = (100 - 35 % ) × $15000 - 35% × ($9000)

expected profit = $6600