Complete the following:
After 12 months in business, you discover that only 10 percent of people who walk through your doors will be buyers. Of those who buy vehicles, the breakdown of vehicle purchases is as follows:
VW Golf 15%
Saab 92X 15%
BMW Z4 20%
Skoda Octavia 10%
Lada Niva 40%
Q1. What is the probability that a potential customer will buy a BMW Z4? A Skoda?
Q2. If in June, 200 people walk through the doors of your dealership, how many will buy a Lada Niva?
After all selling expenses are removed, you make the following profits from the sale of each vehicle type:
VW Golf $1,000
Saab 92X $2,000
BMW Z4 $12,000
Skoda Octavia $1,200
Lada Niva $400
Q3. What is the probability that a customer will walk through the door and provide you with at least a $1,000 profit?
Q4. If 400 people walk through the door in a month, what is your total expected profit?
Q5. Based on the figures, should you continue selling your favorite car, the Lada Niva? Why or why not?