A New Product Has Been Designed with Three Modules

question 24

Multiple Choice

A new product has been designed with three modules. Extensive testing of each module resulted in the following reliabilities: 0.999, 0.998, and 0.995. What is the reliability of the product?

• A) less than or equal to 0.993
• B) greater than 0.993 but less than or equal to 0.994
• C) greater than 0.994 but less than or equal to 0.995
• D) greater than 0.995

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Definitions:

WACC

Weighted Average Cost of Capital; a method for assessing a firm's capital costs by applying proportional weights to each kind of capital.

Credit Rating

An evaluation of the creditworthiness of an individual or corporation, often expressed as a grade or score, that reflects the likelihood of the entity defaulting on its debts.

Cost of Debt

The effective rate that a company pays on its total debt.