A company estimates that 0.6% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $300. If they offer a 2 year extended warranty for $35, what is the company's expected value of each warranty sold?

Holt Mcdougal Larson Pre-algebra: Student Edition 2012
1st Edition
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Chapter7: Percents
Section7.7: Simple And Compound Interest
Problem 15E
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A company estimates that 0.6% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $300.

If they offer a 2 year extended warranty for $35, what is the company's expected value of each warranty sold?

$

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