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November 27, 2008
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Is it possible to get reimbursed in new car extended warranty program?
November 25, 2008
joe l asked:
I just bought a new Ford Escape and I was offered a 7 years extended warranty for $1600. The salesperson told me that I can get ALL my money back if I will not put more than 70.000 miles in my car in 7 years. Is this program real or is there a catch?
How do I Calculate this Confidence Level?
November 23, 2008
Five years ago, an automobile manufacturer started offering an extended warranty to buyers of its sport utility vehicle. The extended warranty covered defects occurring after the initial three year warranty expired. Of the 10,000 people who bought the sport utility vehicle in the first year of the program, 15 percent purchased the extended warranty.
In the warranty department, you have recently received data on a random sample of 200 of the cars sold in the first year that the extended warranty was available. For this sample, the average extended-warranty expenditure per car for the one year period after the initial warranty elapsed was $350 with a standard deviation of $100.
a.What is a 95-percent confidence interval for the mean one year extended warranty expenditure per automobile?
b.At its introduction, the extended warranty was priced at $225 per year per automobile. Compute a 95 percent confidence interval for the one-year profitability of the extended warranty.
c.How large a sample would the warranty department require if it wanted its 95 percent confidence interval to be no more than + or - $5?
In the warranty department, you have recently received data on a random sample of 200 of the cars sold in the first year that the extended warranty was available. For this sample, the average extended-warranty expenditure per car for the one year period after the initial warranty elapsed was $350 with a standard deviation of $100.
a.What is a 95-percent confidence interval for the mean one year extended warranty expenditure per automobile?
b.At its introduction, the extended warranty was priced at $225 per year per automobile. Compute a 95 percent confidence interval for the one-year profitability of the extended warranty.
c.How large a sample would the warranty department require if it wanted its 95 percent confidence interval to be no more than + or - $5?
Thank you for that very thorough answer. Any chance you could show me how to do this on an Excel Spreadsheet?
By: brngreenlee
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