2. Provision for Guaranty Given to Customers The computer firm Axer sells notebooks.

In 2010, it granted to its customers a 12-month guaranty on 100,000 computers (for both parts and labour). Axer’s after-sales service estimates that there is a 94% chance that no incident will happen, a 4% chance that Axer will need to do a €100 repair and a 2% chance of a €500 repair.

On 12/31/2010, what provision should be recorded in Axer’s books?