TABLE 6-1 A Company Has 125 Personal Computers. the Probability That Any

question 111

Multiple Choice

TABLE 6-1
A company has 125 personal computers. The probability that any one of them will require repair on a given day is 0.15.
-Referring to Table 6-1, which of the following is one of the properties required so that the binomial distribution can be used to compute the probability that no more than 2 computers will require repair on a given day?

• A) The probability that a computer that will require repair in the morning is the same as that in the afternoon.
• B) A randomly selected computer on a given day will either require a repair or will not.
• C) The number of computers that will require repair in the morning is independent of the number of computers that will require repair in the afternoon.
• D) The probability that two or more computers that will require repair in a given day approaches zero.

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Definitions:

Deceased Shareholder

A situation where a shareholder of a company passes away, triggering legal and financial actions regarding the ownership of the shares.

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting fees, legal fees, and registration fees.

Financial Leverage

The use of borrowed money to increase the potential return of an investment.

Unlevered Cost of Capital

The cost of capital for a company with no debt, reflecting the required rate of return on equity for an entirely equity-financed firm.