Nick is consideriog buyiog a new bicycle.Here are his options: Bike A- costs $100.It has a 60% chance of breaking down in the next year.Bike B- costs $200.It has a 20% chance ofbreakiog down in the next year.Bike C- costs $400.It has a 15% chance ofbreakiog down in the next year.
Which bike should Nick purchase based on expected utility theory of repair costs?
A)Bike A
B)BikeB
C)Bike C
D)Either bike A or C
E)We can't possibly answer the question with the ioformation provided.

Question

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The Answer of Nick is consideriog buyiog a new bicycle.Here are his options: Bike A- costs $100.It has a 60% chance of breaking down in the next year.Bike B- costs $200.It has a 20% chance ofbreakiog down in the next year.Bike C- costs $400.It has a 15% chance ofbreakiog down in the next year.
Which bike should Nick purchase based on expected utility theory of repair costs?
A)Bike A
B)BikeB
C)Bike C
D)Either bike A or C
E)We can't possibly answer the question with the ioformation provided.

Nick Is Consideriog Buyiog a New Bicycle