Answer:
$5,760
Explanation:
When there's a defect, you return the $600 paid and you'll also double this amount.
This means that you'll lose $600 in total.
The total expected cost of 1 motor is is the sum of the product of gain and their probability
i.e.
Expected Value = $600 * (1 - 0.02) + (-$600) * 0.02
Expected Value = $600 * 0.98 - $600 * $0.02
Expected Value = $600 * ($0.98 - $0.02)
Expected Value = $600 * 0.96
Expected Value = $576
The Expected net gain on 10 motors is calculated by
10 * $576
= $5,760
