Use a Poisson Approximation to the Binomial to Work Out

question 1

Multiple Choice

Use a poisson approximation to the binomial to work out the probability that there will be less than two faulty electric motors in a box of 100 with a defect rate of 0.5% (as a percentage, 1 decimal place)

• A) 3.8%
• B) 4.0%
• C) 4.2%
• D) 4.4%

---

Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or decline in value.

Ending Inventory

The final amount of products available for sale at the conclusion of a fiscal period.

Investments

Assets purchased with the goal of generating income or appreciating in value over time.

Accounting Changes

Accounting Changes are modifications in the accounting methods, estimates, or reporting entity that affect the financial statements of a company.