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QUESTION
Joe is buying a new plasma TV at Circuit Town. The salesman offers Joe a three-year extended warranty for $90.
Joe is buying a new plasma TV at Circuit Town. The salesman offers Joe a three-year extended warranty for $90. The salesman tells Joe that 24% of these plasma TVs require repairs within the first three years, and the average cost of a repair is $450. Should Joe buy the extended warranty? What is the expected value of the warranty?
