Question

PLEASE USE EXCEL AND SHOW EXCEL FORMULAS USED W/THE FORMULA ARGUMENTS

Plan A Plan B Payout P Payout $30,000 0.55 $45,000 $70,000 Payout PPayout -$50,000 0.26 $30,0000.49 $35,000 0.1 0.25 0.35

PLEASE USE EXCEL AND SHOW EXCEL FORMULAS USED W/THE FORMULA ARGUMENTS THANK YOU!

Answer 1

NORMDIST Plan A 4 Pavout P(Pavout) Expected Pavout P(X XP(X ($50,000 $30,000 $35,000 0.26-C6"D 0.49 0.25 Total sum 10 Plan B PayoutP(Payout) Expected Payout 12 13 14 15 16 17 18 P(X XP(X $30,000 $45,000 $70,000 0.26 0.49 0.25 Total sum

NORMDIST Plan A PayoutP(Payout) Expected Payout P(X XP(X 50,000 30,000 $35,000 0.26 0.49 0.25 $13,000 $14,700 $8,750 Total sum Esum(E6:E8) 10 Plan B Pavout P(Pavout) Expected Pavout 12 13 14 15 16 17 18 P(X XP(X $30,000 $45,000 $70,000 0.26 0.49 0.25 Total sum

114 Plan A 4 PayoutP(Payout) Expected Payout P(X XP(X ($50,000 $30,000 $35,000 0.26 0.49 0.25 $13,000 $14,700 $8,750 ($18,950 Total sum 10 Plan B PayoutP(Payout) Expected Payout 12 13 14 15 16 17 18 19 P(X XP(X $30,000 $45,000 $70,000 0.26 0.49 0.25 $7,800 $22,050 $17,500 $31,750 Total sum

Formulae:

$Expected Payout = \sum x P(x)$

Here expected Payout for plan A =$18,950

expected Payout for plan B = $ 31,750

we observed that expected Payout for Plan B is greater than Plan A So Plan B has higher payout.