O MotoWin should expect to neither make nor lose money from offering these warranties. In the long run, they should expect to lose dollars on each warranty sold. O MotoWin can expect to lose money from offering these warranties. In the long run, they should expect to make dollars on each warranty sold. OMotoWin can expect to make money from offering these warranties. To answer, take into account the price of the warranty and the expected value of the cost from replacing the car. If MotoWin knows that it will sell many of these warranties, should it expect to make or lose money from offering them? How much? under the warranty, there is a 6% chance that MotoWin would have to replace the car one time and that MotoWin would replace the car free of charge under certain, specified conditions. Replacing the MotoWin Auto Superstore is thinking about offering a two-year limited warranty for $979 on all new
O MotoWin should expect to neither make nor lose money from offering these warranties. In the long run, they should expect to lose dollars on each warranty sold. O MotoWin can expect to lose money from offering these warranties. In the long run, they should expect to make dollars on each warranty sold. OMotoWin can expect to make money from offering these warranties. To answer, take into account the price of the warranty and the expected value of the cost from replacing the car. If MotoWin knows that it will sell many of these warranties, should it expect to make or lose money from offering them? How much? under the warranty, there is a 6% chance that MotoWin would have to replace the car one time and that MotoWin would replace the car free of charge under certain, specified conditions. Replacing the MotoWin Auto Superstore is thinking about offering a two-year limited warranty for $979 on all new
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section: Chapter Questions
Problem 35T
Related questions
Question
MotoWin Auto superstore is thinking about offering a 2-year limited warranty for $979 on all new cars of a certain model. The terms of the warranty will be that MotoWin with replace the car free of charge under certain and specific conditions. Replacing the car in this way will cause MotoWin $15,500. Suppose that under the warranty there is a 6% chance that MotorWin would have to replace the car one time and a 94% chance they wouldn't have to replace the car.
Transcribed Image Text:O MotoWin should expect to neither make nor lose money from offering these warranties.
In the long run, they should expect to lose dollars on each warranty sold.
O MotoWin can expect to lose money from offering these warranties.
In the long run, they should expect to make dollars on each warranty sold.
OMotoWin can expect to make money from offering these warranties.
To answer, take into account the price of the warranty and the expected value of the cost from
replacing the car.
If MotoWin knows that it will sell many of these warranties, should it expect to make or lose
money from offering them? How much?
under the warranty, there is a 6% chance that MotoWin would have to replace the car one time and
that MotoWin would replace the car free of charge under certain, specified conditions. Replacing the
MotoWin Auto Superstore is thinking about offering a two-year limited warranty for $979 on all new
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