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A company estimates that 0.8% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $50.

If they offer a 2-year extended warranty for $7, what is the company's expected value of each warranty sold? Round your answer to the nearest cent.

User Mickp
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Answer:

The expected value of each warranty sold is $23.8.

User Rayray
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