OP Car selection
Robert wants to buy a used car. Robert finds the following options:
Option 1: Buy Honda Civic at 15000$ which gives a mileage of 26 miles/Gallon.
Option 2: Buy Toyota Corolla at 20000$ which gives a mileage of 33 miles/Gallon.
Robert is not sure about both the mileage and fuel price. The uncertainty of mileage is that of Table and Fuel price uncertainty follows beta distribution with pessimistic price being 3.92$/Gallon, most likely being 3.55$/Gallon and optimistic price being 3.01$/Gallon. Determine the low cost car for Roberts and draw a graph illustrating a crossover or indifference or break even point?
Table
Mileage and their probabilities
Probability Miles Robert would be travelling
0.1 50000 miles
0.3 75000 miles
0.35 100000 miles
0.25 200000 miles
12 years ago
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- car_selection.xlsx