The average value of transactions made with cash or a gift card is $90.
The probability of a transaction being made without a store card = 48% = 0.48 (48/1,000)
Average value per transaction = 58
Expected value per transaction = $27.84 (58 × 0.48)
Probability of a transaction being made without a store card = 0.52 (1 - 0.48)
Expected value per transaction without a store card = $38.48 ($74 × 0.52)
Store's expected value transactions = $66.32. ($27.84 + $38.48)
The average transaction value for transactions:
Let the average transaction made with cash or a gift card = m
74 = (0.80 × 70) + 0.20 × m
74 = 56 + 0.20m
0.20m = 74 - 56
0.20m = 18
m = 18/0.20
m = $90
Thus, we can conclude that the average value of transactions made with cash or a gift card is $90.
Complete Question:
Drag each value to the correct location on the tree diagram. Not all values will be used.
$90 $27.84 $66.32 $46.8 $38.48 $29.12 $31.24
What is the average value of transactions made with cash or a gift card?