The Only Car Dealership in a Community Stocks Cars from Two

question 2

Multiple Choice

The only car dealership in a community stocks cars from two manufacturers, Fret and Cessy. The following transition matrix shows the probabilities of a customer purchasing each brand of car in the next year given that he or she purchased that car in the current year. $$\begin{array} { l c c c } \text { From } / & \text { To } & \text { Fret } & \text { Cessy } \\\hline \text { Fret } & & .7 & .3 \\\text { Cessy } & & .4 & .6 \\\hline\end{array}$$ Given that a customer purchased the brand Fret in the present year (year 1) , determine the probability that a customer will purchase Cessy in year 3.

• A) .7
• B) .61
• C) .39
• D) .21
• E) .18

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Definitions:

Current Assets

Resources anticipated to be transformed into cash, disposed of, or utilized within a twelve-month period or the duration of the operating cycle, depending on which is greater.

Current Liabilities

Short-term financial obligations due within one year, including accounts payable, short-term loans, and other debts.

Gross Profit

The difference between revenue and the cost of goods sold before deducting overhead, payroll, taxes, and interest payments.

Gross Margin

The difference between sales revenue and the cost of goods sold, divided by sales revenue, expressed as a percentage. It represents the proportion of sales revenue that exceeds direct costs.