A large industrial firm purchases several new word processors at end of each year. The exact number of word processors purchased depends upon the frequency of number of repairs in the previous year. Assume that the number of word processors x that are purchased each year has the following probability distribution
x 0 1 2 3
f(x) 1/10 5/10 1/5 2/5
The cost of the desired model is $1200 per processor and a discount of 50 X^2 dollars is credited towards any purchase. There is also a fixed cost of $600 regardless of the number of processors purchased. How much can this firm expect to spend on new word processors?