A Company Manufactures Shoes in Three Different Factories

question 11

Multiple Choice

A company manufactures shoes in three different factories. Factory Omaha Produces 25% of the companyʹsshoes, Factory Chicago produces 60%, and factory Seattle produces 15%. One percent of the shoes produced inOmaha are mislabeled, 0.5 % of the Chicago shoes are mislabeled, and 2% of the Seattle shoes are mislabeled.If you purchase one pair of shoes manufactured by this company what is the probability that it was labeledcorrectly?

• A) 0.991
• B) 0.035
• C) 0.9
• D) 0.08

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Definitions:

Present Value

The immediate financial value of a future cash sum or succession of cash inflows, evaluated with a specified return rate.

Expected Cash Flows

Forecasted cash inflows and outflows for a business or project, often used in financial modeling to evaluate investment viability.

Yield to Maturity

The total return anticipated on a bond if it is held until the date it matures.

Premium

An amount paid that is above the standard or nominal cost, often for insurance, superior goods, or to designate a higher level of service or coverage.