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Decision Making and State of Nature

Allen Abbott has a wide-curving, uphill driveway leading to his garage. When ther is a heavy snow, Allen hires a local carpenter, who shovels snow on the side in teh winter, to shovel his driveway. The snow shoveler charges charges $30 to shovel the driveway. Following is a probability distribution of the number of heavy snows each winter

Heavy Snows Probability
1 .13
2 .18
3 .26
4 .23
5 .10
6 .07
7 .03

Allen is considering purchasing a new self-propelled snowblower for $625. that would allow him, his wife, or his children to clear the driveway after a snow. Discuss what you think allen's decision should be and why?

Solution Summary

This solution explains whether or not a person should buy a snowblower based on price of a snowblower, the price of paying someone to shovel the driveway, and the probability distribution of heavy snows in a year.