Solve Applications Involving Expected Values

question 19

Multiple Choice

Solve applications involving expected values.
-A fast food restaurant just leased a new freezer and food fryer for three years. The
Service contract for the freezer offers unlimited repairs for a fee of $125 a year plus a $35
Service charge for each repair needed. The restaurant's research indicates that during a
Given year 80% of these freezers need no repairs, 11% needed to be serviced once, 5%
Twice, 4% three times, and none required more than three repairs. The mean restaurant's
Annual expense with the service contract for this freezer is

• A) $25.20.
• B) $136.55.
• C) $122.45.
• D) $89.90.
• E) $0.

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