BatCo, a Company That Sells Batteries, Claims That 99

question 79

Multiple Choice

BatCo, a company that sells batteries, claims that 99.5% of their batteries are in working order. How
Many would you expect to buy, on average, to find one that does not work?

• A) 5
• B) 995
• C) 2000
• D) 200
• E) 100

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Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Total Assets

The sum of all assets owned by an entity, including both current and non-current assets, representing the total resources available for use in operations.

Stock Splits

A corporate action that divides the company's existing shares into multiple shares to boost the liquidity of the shares, though the overall market cap remains the same.

Stock Dividends

A dividend payment made in the form of additional shares rather than a cash payout, increasing the number of shares owned.