Assignment:
Ward Doering Auto Sales is considering offering a speical service contract that will cover the total cost of an service work required on leased vehicles. From experience, the company manager estimates that yearly service costs are approximately normally distributed, with mean of $150 and a standard deviation of $25.
A) If the company offers service contract to customers for a yearly charge of $200, what is the probability that any one customers service costs will exceed the contract price of $200?
B) What is Ward's expected profit per service contract?
Provide complete and step by step solution for the question and show calculations and use formulas.