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A company makes a $5 profit on each non-faulty product it sells. Approximately 2% of the products manufactured are faulty, with no way to discover which ones are faulty before delivery. If replacement-and-repair costs for the faulty products are $100 each, what is the profit per item? loss of $15. 10 loss of $15 profit of $2. 90 profit of $3. 0.

Answer :

Abiolataiwo2015go

Based  on the information given the profit per item is $2.90.

First step is to calculate the company profit

Profit=(100%-2%)×$5

Profit=98%×$5

Profit=$4.9

Second step is to calculate the profit per item

Profit per item=$4.9-($100×2%)

Profit per item=$4.9-$2

Profit per item=$2.90

Inconclusion  the profit per item is $2.90.

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