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Digitalis is a technology company that makes high-end computer processors. Their newest processor, the luteA, is going to be sold directly to the public. The
Digitalis is a technology company that makes high-end computer processors. Their newest processor, the luteA, is going to be sold directly to the public. The processor is to be sold for $2700, making Digitalis a profit of $464. Unfortunately there was a manufacturing flaw, and some of these luteA processors are defective and cannot be repaired. On these defective processors, Digitalis is going to give the customer a full refund. Suppose that for each luteA there is a 13% chance that it is defective and an 87% chance that it is not defective. m If Digitalis knows it will sell many of these processors, should it expect to make or lose money from selling them? How much? [ To answer, take into account the prot earned on each processor and the expected value of the amount refunded due to the processor being defective. O Digitalis can expect to make money from selling these processors. In the long run, they should expect to make dollars on each processor sold. O Digitalis can expect to lose money from selling these processors. In the long run, they should expect to lose dollars on each processor sold. O Digitalis should expect to neither make nor lose moneyr from selling these processors
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