A Company Is Considering Producing Some New Gameboy Electronic Games

question 87

Multiple Choice

A company is considering producing some new Gameboy electronic games.Based on past records,management believes that there is a 70 percent chance that each of these will be successful and a 30 percent chance of failure.Market research may be used to revise these probabilities.In the past,the successful products were predicted to be successful based on market research 90 percent of the time.However,for products that failed,the market research predicted these would be successes 20 percent of the time.If market research is performed for a new product,what is the probability that the results indicate an unsuccessful market for the product and the product is actually unsuccessful?

• A)0.63
• B)0.06
• C)0.07
• D)0.24
• E)0.21

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Definitions:

Aging

A process or method used to categorize accounts receivable based on their time outstanding.

Receivables Growth Rate

The rate at which a company's accounts receivable balance is increasing over a specific period, indicating the speed of cash inflow acceleration.

Sales Data

Information and records related to the quantity, price, and terms of sales transactions made by a company.

Sale of Receivables with Recourse

A financial transaction where a company sells its receivables to another party but remains liable if the party owing the receivables fails to pay.