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To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Attendance is limited to 25 individuals per seminar. Each seminar costs Gustin $3500, and the average first-year commission for each new account opened is $5000. Historical data collected over the past four years show that the number of new accounts opened at a seminar varies from no accounts opened to a maximum of six accounts opened according to the following probability distribution:
Number of New
Accounts Opened Probability
0 ...........0.01
1 ..........0.04
2 ..........0.10
3 ..........0.25
4 ..........0.40
5 ..........0.15
6 ..........0.05
a. Set up intervals of random numbers that can be used to simulate the number of new accounts opened at a seminar.
b. Using the first 10 random numbers in column 9 of Table 16.2, simulate the number of new accounts opened for 10 seminars.
c. Would you recommend that Gustin continue running the seminars?
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