Use the Information for the Question(s)below

question 38

Multiple Choice

Use the information for the question(s) below.
DM Skateboard company is planning to develop a new electric skateboard.In order for the project to be successful,the company must develop a new deck to accommodate a lightweight battery and a remote that is easy to operate while moving in an open environment.The company estimates the following costs,times,and probabilities of success for each component of the new skateboard: All three risks are idiosyncratic and the risk-free rate of interest is 5%.The company does not have the resources to develop all the components at the same time.Therefore,management needs to decide in what order to develop the technologies.
-What is the failure cost index of the battery technology?

• A)0.00375
• B)0.00392
• C)0.99875
• D)0.99892

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Definitions:

Tautology

A statement that is true by necessity or by virtue of its logical form.

Conjunct

In logic, a component of a compound statement formed by joining two statements with the word 'and'.

Conjunction

In linguistics, a term employed to link clauses or sentences together, or to arrange words within a single clause.

Disjuncts

Components in a logical expression that are combined with an OR operator, where the expression is true if at least one of the disjuncts is true.