Find the Indicated Probability

question 170

Multiple Choice

Find the indicated probability.
-A company manufactures calculators in batches of 55 and claims that the rate of defects is 5%. Find the probability of getting exactly 3 defects in a batch of 55 if the rate of defects is 5%. If a store receives a batch of 55
Calculators and finds that there are 3 defective calculators, do they have any reason to doubt the company's
Claimed rate of defects?

• A) 0.237; No. If the rate of defects is really 5%, it is not so unlikely to find 3 defects in a batch of 55 calculators.
• B) 0.0180; Yes. If the rate of defects is really 5%, the probability of finding 3 defects in a batch of 55 calculators is very small.
• C) 1.37; No. If the rate of defects is really 5%, it is not so unlikely to find 3 defects in a batch of 55 calculators.
• D) 0.228; No. If the rate of defects is really 5%, it is not so unlikely to find 3 defects in a batch of 55 calculators.

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Definitions:

Ledger Accounts

A record within the general ledger that is used to collect and store balance and transaction information for individual items such as assets, liabilities, equity, revenues, and expenses.

Retained Earnings Account

An equity account that represents the accumulated portion of net income that a company has decided to keep and reinvest in the business rather than distribute to shareholders as dividends.

Permanent Account Balances

Permanent account balances are those balances in accounts that are carried over into the next accounting period, including assets, liabilities, and equity accounts.