LM Company needs to make provision for the cost of repairing faulty product supplied to customer some weeks previously. It is estimated that a 60% chance that this repair will cost $100000, 30% chance that the cost will be $150000, and 10% chance that the cost will be $200000.

Requirements:

1- How should the amount of provision be measured?

2- Explain if there is only one definite way or method to apply.