ABC sells refrigerators. Any refrigerator that fails before it is 3 years old is replaced for free. Of all refrigerators, 2% fail during their first year of operation; 4% of all 1-year-old refrigerators fail during their second year of operation; and 8% of all 2-year-old refrigerators fail during their third year of operation. It costs ABC $500 to replace a refrigerator, and ABC sells 6,000 refrigerators per year.
Estimate the fraction of all refrigerators that will have to be replaced.
What will be an ideal response?
?
?
?
The percentages 14% and 6% (based on 5000 iterations) estimate the numbers of new refrigerators that fail sometime under the warranties (3 years and 2 years, respectively). They're used in the cost analysis in Question 94.
You might also like to view...
The form of competition in which there are many sellers and they each have a similar product is referred to as ________.
A. monopolistic competition B. an oligopoly C. singular competition D. pure competition E. a monopoly
Which of the following does not describe the continental model of financial reporting?
a. A weak accounting profession b. Strong governmental influence c. The primacy of investor needs over tax influences and creditor needs d. Emphasis of debt financing over equity capital
A "slide show" is one of the most difficult to present
a. true b. false
An interrogatory would be a tool by attorneys in the discovery process
a. True b. False Indicate whether the statement is true or false