A video rental store has three video cameras available for customers to rent. Historically, demand for cameras during the June 'wedding season' has followed the distribution in the table below. The revenue per rental is $40. If a customer wants a camera and none is available, the store gives a $15 coupon for tape rental.
Demand Relative Frequency Revenue Cost
0 .25 0 0
1 .30 40 0
2 .20 80 0
3 .10 120 0
4 .10 120 15
5 .05 120 30
What is the expected profit? (note: profit is defined as the difference between cost and revenue).
Using expected profit as the decision criterion, does it pay for the store to lease a fourth video camera during June at a cost (to them) of $10 a day?