Exercise 18 suggested that one in four new restaurants close or change ownership within their frst year of business, and that over three years, that number rises to three in five. You randomly select 50 new restaurants. Compute the
In Exercise 18
A study of restaurant failure rates that tracked turnover among 2500 restaurants in Columbus, Ohio, over a three-year period found that one in four restaurants close or change ownership within their first year of business. Over three years, that number rises to three in fve. You select fve new Columbus restaurants. Use the binomial function to compute probabilities for the following events:
a. Expected number of restaurants in this group that will close or change ownership sometime in the frst three years.
b. Variance of the random variable “number of restaurants that will close or change ownership sometime in the frst three years”
c. Standard deviation of the random variable “number of restaurants that will close or change ownership sometime in the frst three years.”