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whipped whipped
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6 years ago
Jerry is interested in purchasing a washing machine. The price of the machine is $500. The probability that the machine will break down is 20% every year. If the machine breaks down in the first year and Jerry holds a warranty, he receives a new washing machine worth $400 that year. If the machine breaks down after two years and he holds a warranty, he receives a new machine that is worth $300 after the second year. The price of a warranty for two years is $100. The market interest rate is 5%. Is buying the warranty a good investment for Jerry? Explain your answer. Show all the necessary calculations.
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Microeconomics

Microeconomics


Edition: 1st
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SudzburySudzbury
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This calls for a celebration Person Raising Both Hands in Celebration
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Smart ... Thanks!
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