1. Which is greater than 4? (a) 5, (b) -5, (c) -1/2, (d) -25.
2 answers:
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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.