Question: On January 1 , 2 0 1 , ABC, Inc. sold a $ 4 8 0 snow blower with a $ 1 2 0

On January

1, 20 \times 1,

ABC, Inc. sold a $

480

snow blower with a $

120

extended warranty. The warranty covers three years of repairs. Assume the costs are not incurred evenly over the warranty, How much warranty revenue would ABC recognize in

20 \times 1

if based on past experience, only

10 %

of costs are incurred on the first year? Calculate.

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