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seropon [69]
3 years ago
7

6. A company estimates that .6% of its products will fail after the original warranty period but within a 5-year warranty period

, with a replacement of $450. If they offer a 5-year extended warranty for $60, what is the company’s expected value for each policy sold? (round to the penny)
Business
1 answer:
Nitella [24]3 years ago
4 0

Answer:

The answer is: $57.30

Explanation:

To determine the expected value of each warranty policy that was sold, we can use the following formula:

expected value = policy price - (probability of failure x cost of replacement)

expected value = $60 - (0.6% x $450)

expected value = $60 - $2.70 = $57.30

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Which of the following is not an advantage of participative budgeting? a.It encourages budgetary slack. b.It tends to lead to a
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An engineer bought a $1000 bond of an American airline for $875 just after an interest payment had been made. The bond paid a 6%
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Answer:

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3 years ago
Suppose that out of the original 100 increase in government spending, 33 will be recycled back into purchases of domestically pr
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Answer:

Multiplier effect in the 4th round = 3.58

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A change in aggregate demand can create a much greater impact in the equilibrium national income. This is known as the multiplier effect. This occurs when injections of new demand for goods and services into the circular flow of income creates further rounds of spending. For example, if the government spending was on building new affordable houses then the need for housing materials will create demand for wood, cement and other housing supplies. Thus, these businesses will see a rise in sales. Whilst they benefit through profits, their employees would benefit from wages and salaries. As their income rises, they will spend it in the economy, and so will the businesses from their profits. This additional rounds of spending is the multiplier effect.

If a 100 increase creates 33 for the second round, it is 33% (33/100 x 100) i.e. 100 x 33% = 33

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