<PRE><B>Question 579176</B>
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). 
a) Winning a lifetime discount has a 1-in-100 chance.
b) Winning a 5-year limited discount has a 1-in-20 chance. 
Is this promotion worth it if the tickets cost $35?
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Random winning values:::::::::: 965::::::: 365 ::::::: -35
Corresponding probabilities:::: 1/100 :::::5/100::::: 94/100
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Expected Value = (965 +  5*365  - 94*35)/100 = -1230/100 = -$12.30
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The company will gain $12.50 on each ticket that is bought.
The ticket buyer can expect to lose $12.50 on each ticket bought.
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Cheers,
Stan H.
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