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In the video tutorial, Alejandra discusses the concept of extended warranties. She explains that twelve percent of the cost of an extended warranty is typically allocated to cover the statistical probability of the item breaking. The remaining amount is used for salaries, overhead, profit, and marketing fees. She points out that if you buy a $1500 extended warranty for your car, the dealership likely makes $700 off of it, while the average repair cost covered by the warranty is $180.
