The Readylite Company Produces a Flashlight Which Is Perfectly Reliable

question 42

Multiple Choice

The Readylite Company produces a flashlight which is perfectly reliable except for two components: the battery,which has a random failure rate of one in every five hours of operation; and the light bulb,which has a random failure rate of three in every ten hours.If the company includes a backup light bulb with each flashlight,what is the probability that the flashlight will perform reliably for one hour (excluding light bulb replacement time,if any) ?

• A)0.6720
• B)0.7280
• C)0.8736
• D)0.9100
• E)0.9600

---

Definitions:

Opportunity Cost

The cost of the next best alternative that is foregone when a decision is made to choose one option over others.

Cash Outlay

The actual amount of money spent by a company to purchase goods or services, as opposed to accounting estimates or accruals.

Alternative Investments

Assets that do not fall into the conventional investment categories such as stocks, bonds, and cash, examples include real estate, commodities, and hedge funds.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.