If the press replaces the machine every 4 years, which statement is true?

 Statistics Tutor: None Selected Time limit: 1 Day

A printing press is considering buying a printing machine. They have two quotations from two different companies.

Company A: The basic cost is \$9,500, and a repair contract of \$75 per month covers unlimited repairs.
Company B: The basic cost is \$13,500, and the company offers a repair contract that charges \$150 per repair.

The probability of the number of repairs to the printing machine offered by Company B is given in the table.

 Number of Repairs 0 1 2 3 Probability 0.32 0.29 0.25 0.14

If the press replaces the machine every four years, which statement is true?
Jun 18th, 2015

2 repairs probability 0.25................................................................................................................

Jun 18th, 2015

Yeah I'm just stuck because I'm not very good at math and I'm stuck on which statement to pick. It gives me these five statements:

-The offer from both companies are equivalent.

-The offer from Company A, with the repair contract, is more cost-effective than the offer from Company B.

-The offer from Company B, with the repair contract, is more cost-effective than the offer from Company A.

-The offer from Company B, without the repair contract, is more cost-effective than the offer from Company A.

-The given data is insufficient to make any decision.

Jun 18th, 2015

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Jun 18th, 2015
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Jun 18th, 2015
Dec 6th, 2016
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