The Blue Sky Flight Insurance Company insures passengers againstair disasters, charging a prospective passenger $20 for coverage ona single plane ride. In the event of a fatal air disaster, it paysout $300,000 to the named beneficiary. In the event of a nonfataldisaster, it pays out an average of $75,000 for hospital expenses.Given that the probability of a plane's crashing on a single trip†is 0.00000087, and assuming that a passenger involved in a planecrash has a 0.9 chance of being killed, determine the profit (orloss) per passenger that the insurance company expects to make oneach trip. HINT [Use a tree to compute the probabilities of thevarious outcomes.] Should the insurance company expect a profit orloss on each trip? profit loss What is the value of the profit (orloss)? (Round your answer to the nearest cent.)
