5
QuizMultiple Choice

Expected Value

Question 5 of 10 • Mathematics III A

A company makes a $5 profit on each non-faulty product it sells. Approximately 2% of the products manufactured are faulty, with no way to discover which ones are faulty before delivery. If replacement-and-repair costs for the faulty products are $100 each, what is the profit per item?

Answer
A
loss of $15.10
B
loss of $15
C
profit of $2.90
D
profit of $3.00
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