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A customer wants to buy a System for a single year (after which it will be scrapped) with plans to use it for 2,500 hrs.

A customer wants to buy a System for a single year (after which it will be scrapped) with plans to use it for 2,500 hrs. Cost Structure (similar products): Particulars Operating Cost/ hour Probability of System Crash Price System-X 2 5 10% 737,500 System-X2 7.50 0.5% Find the TEV for the System-X2 if the cost of a System Crash to the buyer is 1,00,000

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