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29 November, 00:29

Pepsi and Mountain Dew products sponsored a contest giving away a Lamborghini sports car worth $215,000. The probability of winning from a single bottle purchase was 0.0000084. What is the expected payoff value given that the payoff is $0 from a loss

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  1. 29 November, 00:35
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    1.806

    Explanation:

    The computation of expected payoff value is shown below:

    = Worth of sports car * probability of winning from a single bottle purchase + payoff from a loss * (1 - probability of winning from a single bottle purchase)

    = $215,000 * 0.0000084 + 0 * (1 - 0.0000084)

    = 1.806 + 0

    = 1.806

    We simply applied the above formula to determine the expected payoff value
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