Digitalis is a technology company that makes high-end computer processors. Their newest processor, the luteA, is going to be sold directly to the public. The processor is to be sold for $4500 , making Digitalis a profit of $383 . Unfortunately there was a manufacturing flaw, and some of these luteA processors are defective and cannot be repaired. On these defective processors, Digitalis is going to give the customer a full refund. Suppose that for each luteA there is an 11% chance that it is defective and an 89% chance that it is not defective. If Digitalis knows it will sell many of these processors, should it expect to make or lose money from selling them? How much?

Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter2: Systems Of Linear Equations
Section2.4: Applications
Problem 24EQ: Suppose the coal and steel industries form a closed economy. Every $1 produced by the coal industry...
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Digitalis is a technology company that makes high-end computer processors. Their newest processor, the luteA, is going to be sold directly to the public. The processor is to be sold for $4500 , making Digitalis a profit of $383 . Unfortunately there was a manufacturing flaw, and some of these luteA processors are defective and cannot be repaired. On these defective processors, Digitalis is going to give the customer a full refund. Suppose that for each luteA there is an 11% chance that it is defective and an 89% chance that it is not defective. If Digitalis knows it will sell many of these processors, should it expect to make or lose money from selling them? How much?

 

 

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