A Company Has 2 Machines That Produce Widgets

question 51

Multiple Choice

A company has 2 machines that produce widgets.An older machine produces 23% defective widgets,while the new machine produces only 8% defective widgets.In addition,the new machine produces 3 times as many widgets as the older machine does.Given a randomly chosen widget was tested and found to be defective,what is the probability it was produced by the new machine?

• A)0.08
• B)0.15
• C)0.489
• D)0.511

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Definitions:

Equity Method

An accounting technique used when a company has significant influence over another company it invests in, typically reflected by owning 20% to 50% of the voting stock, where the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets.

Reported Loss

Financial results showing that a company's expenses exceeded its revenues during a specific period, leading to a negative net income.

Internal Accounting Records

A collection of documents and ledgers used by a business to track financial transactions, assets, liabilities, and equity.

Equity Method

An approach to account for equity investments by adjusting the investment's value to mirror changes in the investee's net assets.