Could someone please help? I think a.) is 5600 and 3800 I think b.) is binomial,
ID: 3317812 • Letter: C
Question
Could someone please help?
I think a.) is 5600 and 3800
I think b.) is binomial, 25, and 0.01.
I am having trouble with the spread sheet. PLEASE do not copy and past from other answers. Thank you!
To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3800, and the average first-year commission for each new account opened is $5600. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account.
Determine the equation for computing Gustin’s profit per seminar, given values of the relevant parameters. Round your answers to the nearest dollar.
a. Profit = (New Accounts Opened × $_____ ) – $ _______
What type of random variable is the number of new accounts opened? (Hint: Review Appendix 16.1 for descriptions of various types of probability distributions.)
b.) The number of new accounts opened is a ______ random variable with ______ trials and _____ probability of a success on a single trial.
Assume that the number of new accouts you get randomly is:
Construct a spreadsheet simulation model to analyze the profitability of Gustin’s seminars. Round the answer for the expected profit to the nearest dollar. Round the answer for the probability of a loss to 2 decimal places.
c.) The expected profit from a seminar is $______ and there is a _______ probability of a loss.
Would you recommend that Gustin continue running the seminars?
Gustin ______ the seminars in their current format.
d.) How large of an audience does Gustin need before a seminar’s expected profit is greater than zero? Use Trial-and-error method to answer the question. Round your answer to the nearest whole number.
__________ attendees
Explanation / Answer
a. Equation to calculate Gustin's profit per seminar
(New accounts opened)*(Revenue from 1 new account) - (Cost of Seminar) => 1. $5600 and 2. $3800
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b. "number of new accounts opened" is a discrete random variable with multiple possible values
=> Poisson distribution, 25 trials, prob(success on a single trial) = 0.32 [Answer a.]
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Spreadsheet as BELOW:-
c. Expected profit = (- $1336) and Probability of a loss = 0.68
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d. According to spreadsheet, solution 'd.',
Current profits over 25 trials = -$33400 and Expected profit per trial = -$1336
=> They need to change their current format by increasing number of people attending the new seminar.
Current population size attending 1 seminar = 25
New (least) population size attending 1 seminar = 39 [Answer d.]
Formula for Profits: =C3*$G$4-$G$3 Total individuals per seminar 25 Simulation Trial New Accounts Profits P(accounts opened) Total sims 25 1 1 1800 0.04 Expenses 3800 $/seminar 2 0 -3800 0 Revenue 5600 $/new account 3 0 -3800 0 4 0 -3800 0 5 0 -3800 0 Probability distribution 6 0 -3800 0 P(0 accounts) 0.68 failure b. ANSWER 7 0 -3800 0 P(1 account) 0.2 success P(success on a single trial) 0.32 8 2 7400 0.08 P(2 accounts) 0.12 success 9 0 -3800 0 Total Prob. 1 10 0 -3800 0 11 1 1800 0.04 c. ANSWER 12 0 -3800 0 1 Expected profit -1336 Average of profit across trials 13 0 -3800 0 2 P(loss) 0.68 Proportion of trials ending in a loss 14 0 -3800 0 15 0 -3800 0 16 0 -3800 0 d. Current profits -33400 17 1 1800 0.04 ANSWER 18 0 -3800 0 New number of attendees 39 19 0 -3800 0 20 2 7400 0.08 Expected number of accounts opened in 1 trial 0.6864 Formula 21 0 -3800 0 =E29*H22 22 1 1800 0.04 ** 23 0 -3800 0 Expected number of accounts opened in 1 trial 43.84 Formula Trial and Error till we reach the 'Zero losses mark' or the Breakeven point 24 2 7400 0.08 =E29*H22 25 1 1800 0.04 Average accounts opened in 1 trial 0.0176 -->Related Questions
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