(Solution) - Use the information in Exercise 38 32 about the computer components -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Pages: 5 Words: 1375

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Use the information in Exercise 38.32 about the computer components. If the component fails during the first year after purchase, the owner will refund the buyer's purchase price. If the component fails during the second or third year after purchase, he will refund 25% of the buyer's purchase price. Each component is purchased for $300.
a. How much does the owner expect to pay in refunds if a single component is purchased?
b. How much does the owner expect to pay in refunds if 50 components are purchased?