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Suppose That a Car Mechanic Offers You a Deal That

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Suppose that a car mechanic offers you a deal that for the next 3 years any breakdowns will be covered, so long as you bring your car in for $50 preventative maintenance sessions each month. If you predict the likelihood of a breakdown being 25% without the maintenance, how much must a breakdown cost for you to prefer the preventative maintenance?


Definitions:

Sexual Favors

A term typically referring to acts of a sexual nature provided in exchange for advantages or preferential treatment.

Family and Medical Leave Act

A U.S. federal law that provides employees with unpaid, job-protected leave for certain family and medical reasons, ensuring the maintenance of health benefits during the leave.

Top 10 Percent

A term often used in educational contexts to denote students who rank in the top 10% of their class based on grades or academic achievement.

Previous Twelve Months

A period extending back from the current date covering the span of one full year.

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