SOLUTION: A company makes a $5 profit on each non-faulty product it sells. Approximately 2% of the products manufactured are faulty, with no way to discover which ones are faulty before deli

Question 1069285: A company makes a $5 profit on each non-faulty product it sells. Approximately 2% of the products manufactured are faulty, with no way to discover which ones are faulty before delivery. If replacement-and-repair costs for the faulty products are $100 each, what is the profit per item?
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
Start with 100 products
98 are good: $490 is made
2 are not good: $200 is paid.
$290 is made net for 102 products, because two more have to be replaced (assume they are not faulty)
$2.84/product.
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