WI02.final

# WI02.final - NAME 1[20 points A small accounting firm does...

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NAME__________________________ 3/5/2004 1 1. [20 points] A small accounting firm does not own computing facilities. It leases hardware and software on an hourly usage basis from Arthur Enron, Inc (AEI). The firm must plan its computing budget carefully and hence has studied its weekly usage of AEI’s computers. Suppose the weekly usage X (in hours) has the following probability density function (pdf) < - < = otherwise x x x x x f , 0 10 5 ), 10 ( 25 1 5 0 , 25 1 ) ( (i) [5 points] Find the probability that the firm’s usage of AEI’s computers next week will be at most 8 hours. (ii) [5 points] Find the probability that the firm’s usage of AEI’s computers next week will be between 4 and 8 hours? (iii) [10 points] Suppose that AEI charges the firm \$200/hour for hardware and software usage, but the minimum amount billed in a week is \$800, irrespective of the time used. Express the weekly bill amount for computer usage as a function of X, and find the expected amount of money that the firm spends each week for leasing computing facilities from AEI.

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