If she wants to guarantee the companys work against major


Question: The Foundation Corporation specializes in constructing the concrete foundations for new houses in the South. The company knows that because of soil types, moisture conditions, variable construction, and other factors, eventually most foundations will need major repair. On the basis of its records, the company's president believes that a new house foundation on average will not need major repair for 20 years. If she wants to guarantee the company's work against major repair but wants to have to honor no more than 10% of its guarantees, for how many years should the company guarantee its work? Assume that occurrences of major foundation repairs are Poisson distributed.

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