Which of the Following Statements About Acceptance Sampling Is True

question 62

Multiple Choice

Which of the following statements about acceptance sampling is true?

• A) The steeper an OC curve, the better it discriminates between good and bad lots.
• B) Acceptance sampling removes all defective items.
• C) Acceptance sampling of incoming lots is replacing statistical process control at the supplier.
• D) Acceptance sampling occurs continuously along the assembly line.
• E) The more gradual an OC curve, the better it discriminates between good and bad lots.

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Definitions:

EBIT

Earnings before interest and taxes, a measure of a firm's profitability that excludes interest and income tax expenses.

Financial Leverage

The use of borrowed funds to increase the potential return on investment, amplifying both potential gains and losses.

Returns to Shareholders

The gains earned by shareholders on their investments in a corporation, typically in the form of dividends and stock price appreciation.

WACC

Stands for Weighted Average Cost of Capital; it represents the average rate of return a company is expected to pay its security holders to finance its assets.