Suppose That for a Particular Piece of Machinery, the Frequency

Multiple Choice

Suppose that for a particular piece of machinery, the frequency distribution of monthly breakdowns is as follows: $$\begin{array} { c c } \hline \text { Number of Breakdowns } & \text { Prob. } \\0 & 0.50 \\1 & 0.25 \\2 & 0.10 \\3 & 0.10 \\4 & 0.05\end{array}$$
The cost of a breakdown is $2,000, and the cost of a preventive maintenance program is $2,000 per month. If the preventive maintenance program is adopted, the probability of a machine breakdown is negligible. How much better off per month would the firm be if it adopted preventive maintenance?

A) $100 worse off
B) $200 worse off
C) $100 better off
D) $200 better off
E) $2,000 better off