Sam is offered to purchase the 2-year extended warranty from a retailer to cover the value of his new appliance in case it gets damaged or becomes inoperable for the price of $25. Sam's appliance is worth $1000 and the probability that it will get damaged or becomes inoperable during the length of the extended warranty is estimated to be 3%. Compute the expected profit of the retail company

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Q: If

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A: Answer: We can only answer first 3 subparts so the solution is as given below :