Suppose you work for a company that manufactures electronics. The development analysts estimate that 3% of their flagship product will fail within 2 years of the purchase date, with a replacement cost of $ 1200. A newly hired associate at the company proposes to charge $ 29 for a 2 year warranty. a. Compute the expected value of this proposal. Let X be the amount profited or lost (by the company) on the warranties and P(X) is the probability.(Also interpret the value in complete sentences) E=E=

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Q: Suppose you work for a company that manufactures electronics. The development analysts estimate that…

A: Warranty cost = $79P(Fail) = 0.05P(Not Fail) = 1 – 0.05 = 0.95Replacement cost = $17006

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