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Suppose Your Firm Is Buying Five New Computers

question 45

Short Answer

Suppose your firm is buying five new computers. The manufacturer offers a warranty to replace any computer that breaks down within three years. Suppose there is a 25% chance that any given computer breaks down within three years.
A) What is the probability that exactly one of the computers breaks down within five years?
B) What is the probability that at least one of the computers breaks down within five years?
C) Suppose the warranty for five computers costs $700, while a new computer costs $600. Is the warranty less expensive than the expected cost of replacing the broken computers?

Comprehend the nature and stages of business growth.

Identify the roles and duties of managers in a growing business.

Understand the transition of small businesses to professional management including delegation.

Recognize the need for and attributes of planning and managing growth in a professionally managed small business.

Definitions:

Statutorily Enforceable

Refers to rights or obligations that are created, recognized, and enforced through specific statutes or laws enacted by a legislative body.

Past-Due

Referring to a payment or obligation that has not been met by its deadline.

Breach of Contract

The failure to perform as specified in a legally binding contract, which can lead to legal actions and damages.

Disputed Claim

A contested assertion of a right or demand that is subject to disagreement between parties.