Question

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 $5100, making Digitalis a profit of $502. 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 a 12%chance that it is defective and an 88% 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?

Question image 1Question image 2