document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=579176>Question 579176</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Party Time Co. will run a promotional raffle that offers a chance to win either a lifetime discount on Spring Festival Merchandises (which results in a $1,000 savings) or a 5-year limited discount on any party-goods (which results in a $400 savings).  \r<BR>\n" );
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document.write( "a) Winning a lifetime discount has a 1-in-100 chance.<BR>\n" );
document.write( "b) Winning a 5-year limited discount has a 1-in-20 chance.\r<BR>\n" );
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document.write( "Is this promotion worth it if the tickets cost $35? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #370906 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=370906\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Party Time Co. will run a promotional raffle that offers a chance to win either a lifetime discount on Spring Festival Merchandises (which results in a $1,000 savings) or a 5-year limited discount on any party-goods (which results in a $400 savings). <BR>\n" );
document.write( "a) Winning a lifetime discount has a 1-in-100 chance.<BR>\n" );
document.write( "b) Winning a 5-year limited discount has a 1-in-20 chance. <BR>\n" );
document.write( "Is this promotion worth it if the tickets cost $35?<BR>\n" );
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document.write( "Random winning values:::::::::: 965::::::: 365 ::::::: -35<BR>\n" );
document.write( "Corresponding probabilities:::: 1/100 :::::5/100::::: 94/100<BR>\n" );
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document.write( "Expected Value = (965 +  5*365  - 94*35)/100 = -1230/100 = -$12.30<BR>\n" );
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document.write( "The company will gain $12.50 on each ticket that is bought.<BR>\n" );
document.write( "The ticket buyer can expect to lose $12.50 on each ticket bought.<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H.<BR>\n" );
document.write( " </SPAN>\n" );
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