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A Cell Phone Company Offers a Simple Extended Warranty Plan

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A cell phone company offers a simple extended warranty plan. If your phone is damaged, they will repair it for up to $50. If
you lose or destroy your phone, they will give you a $200 voucher towards a new phone. The company believes that 5% of
customers will need the replacement voucher and 10% will request a repair.
-Is the $25 warranty a wise purchase for you? Given that you will probably buy dozens of
devices over the next decade, are these types of warranties a wise purchase for you?


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