A company estimates that 0.7% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $500. If they offer a 2 year extended warranty for $34, what is the company's expected value of each warranty sold? %24

A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
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Chapter1: Combinatorial Analysis
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Question 28
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A company estimates that 0.7% of their products will fail after the original warranty period but within 2 years
of the purchase, with a replacement cost of $500.
If they offer a 2 year extended warranty for $34, what is the company's expected value of each warranty sold?
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Transcribed Image Text:M * 00 L山 Question 28 <> A company estimates that 0.7% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $500. If they offer a 2 year extended warranty for $34, what is the company's expected value of each warranty sold? Question Help: D Video Submit Question MacBook Air 08 F3 F2 F4 F5 F8 & # $ 2 9 M G N
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