document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1125178>Question 1125178</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A company estimates that 0.2% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $250.\r<BR>\n" );
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document.write( "If they offer a 2 year extended warranty for $21, what is the company's expected value of each warranty sold? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #741493 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=741493\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> They get $21 per warranty<BR>\n" );
document.write( "They pay out 250*0.002=$0.50<BR>\n" );
document.write( "The expected value is the difference or $20.50. </SPAN>\n" );
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