A company estimates that 0.8% of their products will fail after the original warranty period but within 2 years of the purchase,

Question

A company estimates that 0.8% 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 $49, what is the company's expected value of each warranty
sold?
S

Kunduz · Accepted Answer

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