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A System Consists of Two Components, Each of Which Must

question 80

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A system consists of two components, each of which must activate if the system is to activate. One component has a reliability of 0.99. The other has a reliability of 0.95. The components are independent of one another with respect to reliability. What is the overall system reliability?

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Definitions:

Internal Rate

Often referred to as the internal rate of return (IRR), it is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Payback Period

The time duration required for an investment to generate cash flows sufficient to recover the initial cost of the investment.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period, used in capital budgeting to assess the profitability of an investment.

Simple Rate

A basic form of interest calculation representing a percentage of the principal amount over a certain period of time.

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