Question: Please explain how to solve the following question: When Sofia buys a computer for $1,000, she knows that there is a 10% chance that it

Please explain how to solve the following question:

When Sofia buys a computer for $1,000, she knows that there is a 10% chance that it will break within the first year if she treats it with care.She is risk averse and would therefore pay up to $120 for a warranty that will replace the computer if it breaks for any reason during this period.If a risk-neutral firm offered her a warranty at this price, what would its expected profits be if it sold her a warranty at this price?Assume that she treats the computer with care.

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