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A manufacturer sells bearings with a 2 week free replacement warranty The failure time of a engine bearing is known to follow an exponential distribution

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A manufacturer sells bearings with a 2 week free replacement warranty The failure time of a engine bearing is known to follow an exponential distribution with a failure rate of 0.008 per month,. The manufactures cost of production of a bearing is 0.75. By considering the time value of money with a discounting factor of 0.05, determine the expected amount of warranty payment to be made by the manufacturer per unit

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