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car. (If necessary, consult a list of formulas.) If the auto store knows that it will sell many of these warranties, should it expect to make or lose money from offering them? How much? To answer, take into account the price of the warranty and the expected value of the cost from replacing the car. O The auto store can expect to make money from offering these warranties. In the long run, they should expect to make pesos on each warranty sold. O The auto store can expect to lose money from offering these warranties. In the long run, they should expect to lose pesos on each warranty sold. The auto store should expect to neither make nor lose money from offering these O warranties.

car. (If necessary, consult a list of formulas.) If the auto store knows that it will sell many of these warranties, should it expect to make or lose money from offering them? How much? To answer, take into account the price of the warranty and the expected value of the cost from replacing the car. O The auto store can expect to make money from offering these warranties. In the long run, they should expect to make pesos on each warranty sold. O The auto store can expect to lose money from offering these warranties. In the long run, they should expect to lose pesos on each warranty sold. The auto store should expect to neither make nor lose money from offering these O warranties.

College Algebra
College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter9: Sequences, Probability And Counting Theory
Section9.5: Counting Principles
Problem 3SE: Answer the following questions. 3. When given two separate events, how do we know whether to apply...
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Auto Superstore is thinking about offering a two-year limited warranty for $9340 on all new cars of a certain model. The terms of the warranty would be that the auto store would replace the car free of charge under certain, specified conditions. Replacing the car in this way would cost the auto store $121 000. Suppose that under the warranty, there is an 8% chance that the auto store would have to replace the car one time and a 92% chance they wouldn't have to replace the car. (If necessary, consult a list of formulas.) If the auto store knows that it will sell many of these warranties, should it expect to make or lose money from offering them? How much? To answer, take into account the price of the warranty and the expected value of the cost from replacing the car. O The auto store can expect to make money from offering these warranties. In the long run, they should expect to make pesos on each warranty sold. O The auto store can expect to lose money from offering these warranties. In the long run, they should expect to lose pesos on each warranty sold. The auto store should expect to neither make nor lose money from offering these warranties.
Transcribed Image Text:Auto Superstore is thinking about offering a two-year limited warranty for $9340 on all new cars of a certain model. The terms of the warranty would be that the auto store would replace the car free of charge under certain, specified conditions. Replacing the car in this way would cost the auto store $121 000. Suppose that under the warranty, there is an 8% chance that the auto store would have to replace the car one time and a 92% chance they wouldn't have to replace the car. (If necessary, consult a list of formulas.) If the auto store knows that it will sell many of these warranties, should it expect to make or lose money from offering them? How much? To answer, take into account the price of the warranty and the expected value of the cost from replacing the car. O The auto store can expect to make money from offering these warranties. In the long run, they should expect to make pesos on each warranty sold. O The auto store can expect to lose money from offering these warranties. In the long run, they should expect to lose pesos on each warranty sold. The auto store should expect to neither make nor lose money from offering these warranties.
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