3 Each day a large animal clinic schedules 10 horses to be t

3. Each day a large animal clinic schedules 10 horses to be tested for a common respiratory disease. The cost of each test is $80. The probability of a horse having the disease is 0.1. If the horse has the disease, treatment costs $500.

A. What is the probability that at least one horse will be diagnosed with the disease on a randomly selected day?

B. What is the expected daily revenue that the clinic earns from testing horses for the disease and treating those who are sick?

Solution

a)

expected value = probablity * number of tries

=> 0.1 * 10 = 1 horse per day

b) Income= testign horses + treatment

=80*10 + 500*1

800+500= $1300