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

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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 Repairs0123
Probability0.320.290.250.14

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

Thank you for the opportunity to help you with your question!

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

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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
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