Answer:
(a) 11.75%
(b) Profit decreases by $5.88 per calculator.
Step-by-step explanation:
(a) The percentage of failures with time is given by the following expression:
Integrating this function from x = 0 to x = 1 year, gives us the percentage of failures in the first year:
11.75% of the calculators will fail within the warranty period.
(b) If the cost of a calculator is $50, and the profit per sale is $25, the average revenue per calculator is $75. Considering no income in failed calculators, the new cost per calculator is:
The effect of warranty replacement on profit is given by the difference in cost per calculator:
Profit decreases by $5.88 per calculator.