00:01
In this question, we are given that for machined 1, the cost is $2 ,000 and repair cost is $150 per annual.
00:10
So total cost, total cost in next 10 years, in next 10 years is calculated as $2 ,000 plus 150 times of 10.
00:28
So this is equal to $3 ,500.
00:31
So total cost in next 10 years is $3 ,500.
00:37
Now similarly for machine to we are given the cost is, so for machine to the cost is $3 ,000 and the repair cost is random variables.
00:55
Random variables.
00:58
So for 40 % chance that the repair amount is for 40 % chance that the repair amount is $100 which means total cost after 10 years is $4 ,000.
01:14
Similarly, for 20 % chance, the repair amount is $200 and the total cost after 10 years is $5 ,000.
01:29
So 40 % chance when the repair amount is 40 % chance, when required amount is $0, then the total cost is $3 ,000.
01:43
Then the expected total amount is calculated as the expected total amount is calculated as 4 ,000 times of 0 .4 plus 5 ,000 times of 0 .2 plus 3 ,000 times of 0 .4, which adds up to a value of $3 ,800.
02:12
So this is the total expected amount.
02:16
So for machine 1 cost, the use is $3 ,500 as mentioned...