Abby must plan for her lemonade stand next Saturday. She can stock (lemons, sugar) a...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Abby must plan for her lemonade stand next Saturday. She can stock (lemons, sugar) a small amount (cost = $10) or a large amount (cost = $20) of inventory. But the payoff depends on the weather. The revenues are shown below:
|
| no rain | rain |
| stock - small amount | 25 | 20 |
| stock - large amount | 45 | 20 |
The probability of raining on the next Saturday is 0.3. Any leftover stock is worthless.
What is the expected value of profit if she stocks a large amount?
(Note: profit = revenue - cost)
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.