Over the last few months, Ithaca Precision Instruments (IPI) obtained the following measurements on a key quality characteristic of its product:

Observed Quality Characteristic	Probability
0.46	0.05
0.47	0.10
0.48	0.12
0.49	0.15
0.50	0.30
0.51	0.12
0.52	0.10
0.53	0.05
0.54	0.01

The company's experience has been that a customer will reject a product that deviates from the target quality characteristic of 0.50 by more than 0.004. Each rejection costs the firm an estimated $5.00. Determine the expected total quality loss of the observed quality characteristic for IPI. Round final steps of calculation to 4 decimal places (e.g., $18.89568 becomes $18.8957).

Multiple Choice

• $7.8125.

• $312.5000.

• $78.1250.

• $108.1250.

• $31.2500.