Question: Homework 4. Mail-order computers A mail-order computer company offers a 30-day money-back guarantee to any customer who is not completely satisfied with its product. The

Homework 4.

Mail-order computers

A mail-order computer company offers a 30-day money-back guarantee to any customer who is not completely satisfied with its product.

The company realizes a profit of $200 for each computer sold but assumes a loss of $100 for shipping and handling for each unit returned.

The probability that a unit is returned is 0.08.

- (a) what is the expected gain for each unit shipped?

- (b) If the distributor ships 4000 units per year, what is the expected annual profit?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Mathematics Questions!

Q:

Case13 Blue Nile, Inc. "Stuck in the Middle" of the Diamond Engagement Ring Market Alan N. Hoffman Bentley University Built on the premise of making engagement ring selection simpler, Blue Nile, Inc....

Q:

Hi Sara, Please find my attachments for your information. Thank you Masoumeh P 3-2 P 3-2 The following information was obtained from the accounts of Lukes, Inc., as of December 31, 2012. It is...

Q:

Hi Sara, Please find my attachments for your information. Thank you Masoumeh P 3-2 P 3-2 The following information was obtained from the accounts of Lukes, Inc., as of December 31, 2012. It is...

Q:

Hi Sara, Please find my attachments for your information. Thank you Masoumeh P 3-2 P 3-2 The following information was obtained from the accounts of Lukes, Inc., as of December 31, 2012. It is...

Q:

Help on Financial Statement analysis homework, need a perfect solution to improve grade UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10- K (Mark One) 3 ANNUAL REPORT...

Q:

Included in this folder you will find a power point presentation that outlines the basics of the new Revenue Recognition Standard. Included in these slides are specific examples that show you how the...

Q:

Hi Sara Hope you are doing well. I need to prepare Ratio Analysis for eBay company and Amazon. I uploaded the most recent 10-K report for the most recent years, 2014 to 2016. Please let me know if...

Q:

Suppose that the current exchange rate between the dollar and the euro is $1.42 = 1 (i.e., e0-$1.42) and the price per gallon of gas in the Euro zone is 1. Assume that the inflation rate is expected...

Q:

Hi Sara Hope you are doing well. I need to prepare Ratio Analysis for eBay company and Amazon. I uploaded the most recent 10-K report for the most recent years, 2014 to 2016. Please let me know if...

Q:

Read all the materials below and answer the questions: (Please do not attempt to solve if you can not answer all!!!!) 3-1: Chapter 8: Language Barriers and Translation Precautions This chapter starts...

Q:

Mallory Rizocki, marketing manager for Quality Iron Cast- ings, Inc., is trying to figure out how to explain to her boss why a proposed new product line doesnt make sense for them. Mallory is sure...

Q:

U.S. antitrust law reflects U.S. economic policy. If U.S. antitrust law resolves an economic dispute among British companies, has U.S. economic policy been extended to Britain? What are the...

Q:

Wu buy a new piece of equipment for $ 1 7 , 2 3 0 , and you receive a cash inflow of $ 2 , 2 0 0 per year for 1 1 years. What is the internal rate of return? ( Answer in percent to four decimal...

Q:

Your firm has just issued five-year floating-rate notes indexed to six-month U.S. dollar LIBOR plus 1/4%. What is the amount of the first coupon payment your firm will pay per U.S. $1,000 of face...

Q:

Consider 8.5 percent Swiss franc/U.S. dollar dual-currency bonds that pay $666.67 at maturity per SF1,000 of par value. It sells at par. What is the implicit SF/$ exchange rate at maturity? Will the...

Q:

Consider a three-year R1 par Treasury bond with a 7.5% annual yield and 8% semiannual coupon. Its price is R1.0132. A futures contract calling for delivery of this bond only expires in one year. The...

Q:

Joy Tours Ltd. and Fun Tours Ltd. Operate in the same geographical area and are close competitors. People often find their front offices to be similar and though both firms have an official line...

Q:

Among a group of 5 8 programmers, who know either Java or Python or both, 1 5 only know Java and 1 3 only know Python. What is the probability of randomly choosing a programmer who knows both...

Q:

Rayland, Inc., has a division in Canada that makes paint. Rayland has another U.S. division, the Retail Division, that operates a chain of home improvement stores. The Retail Division would like to...

Q:

Jump Start Company (JSC), a subsidiary of Mason Industries, manufactures go-carts and other recreational vehicles. Family recreational centers that feature go-cart tracks along with miniature golf,...

Q:

Raddington Industries produces tool and die machinery for manufacturers. The company expanded vertically in 2010 by acquiring one of its suppliers of alloy steel plates, Keimer Steel Company. To...