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Possibility of changing environmental regulations

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Reference no: EM131105902

A franchised service station is considering the offering of an air conditioner (A/C) repair service. They estimate that 0.23 of their customers will purchase this A/C service, which will generate an average profit of $123 per customer.

The main threat to this new service is the possibility of changing environmental regulations that affect A/C service repairs only. These new regulations will cost $45 per customer. The franchise estimates the probability that the new environmental regulation will go into effect is 0.28.

Calculate the expected value per customer of the new A/C service. Round your answer to one decimal place.

Reference no: EM131105902

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