Suppose That a Company Has 1,000 Workers, 20 of Whom

question 52

Short Answer

Suppose that a company has 1,000 workers, 20 of whom are thieves. Suppose, too, that a polygraph test is 95 percent accurate. If the company subjects all its employees to a polygraph test, how many thieves will be identified? How many innocent employees will be incorrectly identified as thieves?

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Definitions:

Noncash Assets

Assets that cannot be quickly converted to cash, including property, plant, and equipment, and often valued at cost or depreciated cost on the balance sheet.

Liquidation Expenses

Costs incurred during the process of selling off assets or winding up a business, including legal fees, auctioneer fees, and other related expenses.

Cash Distribution

The payment of earnings or capital to shareholders, partners, or members from a corporation, partnership, or other entity, typically in the form of cash.

Noncash Assets

Assets that are not in the form of cash or cash equivalents, including physical property, intellectual property, and investments.