A small business just leased a new presentation equipment and a color laser printer for
three years. The service contract for the computer offers unlimited repairs for a fee of
$100 a year plus a $25 service charge for each repair needed. The company's research
indicates that during a given year 86% of these computers need no repairs, 9% need to be
repaired once, 4% twice, 1% three times, and none required more than three repairs.
A. Find the expected number of repairs for this kind of computer per year.
b. Find the standard deviation of the number of repairs per year.
c. What are the mean and standard deviation of the company's annual expense with the
service contract for the computer?

Question

Quizplus · Accepted Answer

The Answer of A small business just leased a new presentation equipment and a color laser printer for
three years. The service contract for the computer offers unlimited repairs for a fee of
$100 a year plus a $25 service charge for each repair needed. The company's research
indicates that during a given year 86% of these computers need no repairs, 9% need to be
repaired once, 4% twice, 1% three times, and none required more than three repairs.
A. Find the expected number of repairs for this kind of computer per year.
b. Find the standard deviation of the number of repairs per year.
c. What are the mean and standard deviation of the company's annual expense with the
service contract for the computer?

A Small Business Just Leased a New Presentation Equipment and a Color