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Expected profit per warranty be

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Reference no: EM131098694

A company is offering a 2-year extended warranty on a projector. Their research indicates that, on average, about 1 out of 300 of these projectors will fail in the 2 years following the initial manufacturer's warranty. If the projector does fail, they estimate that the repair/replacement cost will average $350.

If the store charges $15 for the extended warranty, what will their expected profit per warranty be?

If the company sells 100,000 projectors and 15% of the customers purchase the extended warranty, what will their expected profits from extended warranty sales be?

Reference no: EM131098694

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