Question: Probability and Expected Value Find BOTH the expected value AND the expected profit or loss A company wants to offer a 2-year extended warranty in

Probability and Expected Value

Find BOTH the expected value AND the expected profit or loss

A company wants to offer a 2-year extended warranty in case their product fails after the original warranty period but within 2 years of the purchase. They estimate that 0.7% of their products will fail during that time, and it will cost them $350 to replace a failed product. If they charge $48 for the extended warranty, what is the company's expected profit or loss on each warranty sold?

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