An Engineering Project Involves Reinforcing a Concrete Beam

question 47

Multiple Choice

An engineering project involves reinforcing a concrete beam. From previous experience it is thought that the probability of corrosion is 1%. A diagnostic test is performed on the reinforced beam. If corrosion is present, then the probability that the test will reveal it is 80% while the probability that the test will miss it is 20%. The diagnostic never yields false positives-that is, it will never indicate corrosion if corrosion is not present. What is the probability of discovering corrosion?

• A)0.001
• B)0.008
• C)0.09
• D)0.8
• E)0.002

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Definitions:

Merchandise Inventory

The collection of goods a company has in stock and available for sale to customers.

Accounts Receivable

Funds that customers owe to a business for products or services that have been provided but remain unpaid.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions to calculate net cash from operating activities.

Operating Activities

Transactions related to the primary activities of a business, such as selling goods and services, which are reflected in the cash flow statement.