A company estimates that 0.4% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $150. If they offer a 2 year extended warranty for $22, what is the company's expected value of each warranty sold? Question Help: Video Submit Question

MATLAB: An Introduction with Applications
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ISBN:9781119256830
Author:Amos Gilat
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A company estimates that 0.4% of their products will fail after the original warranty period but within 2
years of the purchase, with a replacement cost of $150.
If they offer a 2 year extended warranty for $22, what is the company's expected value of each warranty
sold?
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Transcribed Image Text:A company estimates that 0.4% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $150. If they offer a 2 year extended warranty for $22, what is the company's expected value of each warranty sold? Question Help: Video Submit Question
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