Duplicate Question
The question on this page has been marked as a duplicate question.
Original Question
A company estimates that 0.4% of their products will fail after the original warranty period but within 2 years of the purchase...Asked by Taylor
A company estimates that 0.4% 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 $3, what is the company's expected value of each warranty sold?
If they offer a 2 year extended warranty for $3, what is the company's expected value of each warranty sold?