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Hooper Chemical Company, a major chemical firm that uses such raw materials as c

ID: 2772320 • Letter: H

Question

Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum as part of its production process, is examining a plastics firm to add to its operations. Before the acquisition, the normal expected outcomes for the firm were as follows:

Outcomes
($ millions)

Probability

Compute the expected value, standard deviation, and coefficient of variation prior to the acquisition.(Do not round intermediate calculations. Enter your dollar answers in millions rounded to 2 decimal places (e.g., $12,300,000 should be entered as "12.30"). Round the coefficient of variation to 3 decimal places.)

Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum as part of its production process, is examining a plastics firm to add to its operations. Before the acquisition, the normal expected outcomes for the firm were as follows:

Explanation / Answer

Outcomes (A) Probability (B) C = A*B D = (A-X)^2 D*B ($ millions)   Recession 20 0.3 6 400 120   Normal economy 40 0.4 16 0 0   Strong economy 60 0.3 18 400 120 Expected Value (X) 40 Total 240 Standard Deviation 15.49