A company estimates that 0.3% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $50. If they offer a 2 year extended warranty for $6, what is the company's expected value of each warranty sold?
Added by Magdalena H.
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The probability of a product failing within 2 years is 0.3%, which is equal to 0.003. Show more…
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