A fast food restaurant just leased a new freezer and food fryer for three years. The service contract for the freezer offers unlimited repairs for a fee of $125 a year plus a $35 service charge for each repair needed. The restaurant’s research suggested that during a given year 80% of these freezers need no repairs, 11% needed to be serviced once, 5% twice, 4% three times, and none required more than three repairs.
-The yearly service contract for the food fryer estimates a mean annual cost of $140 with a standard deviation of $40.What is the expected value and standard deviation of the total cost for the service contracts for the freezer and the food fryer?

Question

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The Answer is

\begin{array} { l } E ( ext { freezer } + ext { fryer } ) = \$ 136.55 + \$ 140 = \$ 276.55 \\operatorname { Var } ( ext { freezer } + ext { fryer } ) = ( \$ 26.22 ) ^ { 2 } + ( \$ 40 ) ^ { 2 } = 2287.49 , ext { so standard deviation } = \$ 47.83\end{array}

A Fast Food Restaurant Just Leased a New Freezer and Food