A Suntan Lotion Company Is Interested in Expanding to Another

question 76

Multiple Choice

A suntan lotion company is interested in expanding to another market.In Miami,there is a 60% chance of selling 5,000 units at a $5 profit/unit,a 20% chance of selling 4,000 at a $8 profit/unit,and a 20% chance of losing $5,000.In Las Vegas,there is a 70% chance of selling 5,000 units at a $6 profit/unit,a 20% chance of selling 4,000 at a $7 profit/unit,and a 10% chance of losing $5,000.Finally,in San Diego,there is a 40% chance of selling 8,000 units at a $9 profit/unit,a 20% chance of selling 4,000 at a $9 profit/unit,and a 40% chance of losing $20,000.To enter each market there is a cost of $15,000.What market should the company enter?

• A)Miami
• B)Las Vegas
• C)San Diego
• D)Do not enter any market

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Definitions:

Z Score

A statistical measurement that describes a value's relationship to the mean of a group of values, measured in terms of standard deviations from the mean.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values.

Percentile

A statistical value indicating the percentage of scores in a distribution that a specific score is equal to or higher than.

No Child Left Behind

A U.S. Act passed in 2001 aimed at improving the performance of America's primary and secondary schools by increasing standards of accountability.