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A company estimates that 0.2% of their products will fail after the original warranty period but...

A company estimates that 0.2% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $350.

If they offer a 2 year extended warranty for $29, what is the company's expected value of each warranty sold?

A company estimates that 0.5% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $250.

If they offer a 2 year extended warranty for $26, what is the company's expected value of each warranty sold?

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