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Determine the expected profit

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Reference no: EM133021165

Question - A computer store purchased three computers of a certain type at $500 a piece. It will sell them for $1000 a piece. The manufacturer has agreed to repurchase any computers still unsold after a specified period at $200 a piece. Let X denote the number of computers sold, and suppose that p(0)=0.1, p(1)=0.2, p(2)=0.3, p(3)=0.4.

i. Compute the value of E(X).

ii. Determine the expected profit: h(x) = revenue - cost.

iii. Compute the Variance of h(X).

Reference no: EM133021165

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