A company estimates that 0.6% of their products will fail after the original warranty period but within 2 years of the purchase,

Question

A company estimates that 0.6% of their products will fail after the original warranty period but
within 2 years of the purchase, with a replacement cost of $300.
If they offer a 2 year extended warranty for $23, what is the company's expected value of each
warranty sold?

Kunduz · Accepted Answer

Click to see the answer