Johnny heads to the store with $20. He spends $7 on a t-shirt, then buys some candy bars for $1.50 each. How many candy bars cou
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Answer:
$44.90
Step-by-step explanation:
The resulting value for the company of replacing a failed product is given by the price of the warranty minus the cost of replacement:
This event has a 0.7% chance of happening.
The resulting value for selling extended warranty to a product that does not fail is given by the proce of the warranty:
This event has a 99.3% chance of happening.
The expected value is:
The expected value for each warranty sold is $44.90.