Hi there!

To have a higher response rate here and also to get more out of the exercise, I'd recommend you give a first go to the answer yourself. Then we can chip in with feedback. 

Best,
Cristian

They are selling warranty, which is basically insurance. The cost of insurance is the cost of a negative event * probability of said event

So the replacement cost is 5000€. But they will only incur at that cost 22% of the time. 78% of the time their cost will be 0€.

This is why you multiply 22%*5000€. On average, across all of their vehicle base, they will have a cost of 22%*5000€ per insured vehicle.

Hi there,

I'm super concerned by the fact that you've asked 3 questions on just 1 single case here.

(Please don't feel like you can't ask questions by the way!)

But it does sound like you could really use a reset in how you're approach math (learning how to figure it out yourself). 

Consider getting a coach. Check out rocketblocks (for math/charts/exhibits only). Review how you approach math (learn to take a step back, break it down, and figure it out yourself in order to maximize learning)