Orange Inc. offers a discount on an extended warranty on its oPhone when the warranty is purchased
Fantastic news! We've Found the answer you've been seeking!
Question:
Orange Inc. offers a discount on an extended warranty on its oPhone when the warranty is purchased at the time the oPhone is purchased. The warranty normally has a price of $150, but Orange offers it for $120 when purchased along with an oPhone. Orange anticipates a 75% chance that a customer will purchase the extended warranty along with the oPhone. Assume Orange sells to 1,000 oPhones with the extended warranty discount offer.
What is the total stand-alone selling price that Orange would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 oPhone contracts?
Related Book For
Intermediate Microeconomics and Its Application
ISBN: 978-1133189039
12th edition
Authors: Walter Nicholson, Christopher M. Snyder
Posted Date: