+1 (208) 254-6996 [email protected]
  

Sheet1

Car Rental
Scenario 1
Insurance cost$10
Minor accident$ 1,500
Major accident$ 15,000
No accidentMinor accidentMajor AccidentExpected Value
Take insurance($10)($10)($10)$ (10.00)
Decline insurance$ – 0$ (1,500)$ (15,000)$ (9.90)
Probability99.79%0.16%0.05%
Based on the above calculation, what is the best value decision? What would you do? Explain!
How would you evaluate the risk involved in this scenario? Explain!
Scenario 2
Insurance cost$15
Minor accident$ 2,500
Major accident$ 25,000
No accidentMinor accidentMajor AccidentExpected Value
Take insurance($15)($15)($15)$ (15.00)
Decline insurance$ – 0$ (2,500)$ (25,000)$ (16.50)
Probability99.79%0.16%0.05%
Based on the above calculation, what is the best value decision? What would you do? Explain!
How would you evaluate the risk involved in this scenario? Explain!

Order your essay today and save 10% with the discount code ESSAYHELP