A company estimates that 9 % of their products will fail after the original warranty period but

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Question:

A company estimates that

9 %

of their products will fail after the original warranty period but within

2

years of the purchase, with a replacement cost of $

50 .

If they want to offer a

2

year extended warranty, what price should they charge for the warranty so that they'll break even

(

in other words, so the expected value will be

0)

Posted Date: Jun 25, 2024 01:16 PM

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A company estimates that 9 % of their products will fail after the original warranty period but

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