A Cell Phone Manufacturer Inspects the Video Display on Each

question 2

Multiple Choice

A cell phone manufacturer inspects the video display on each color phone to verify that the screen can display all colors with the brilliance their customers have come to expect. Each phone is turned on, run through a self-test procedure, and classified as either acceptable or unacceptable based on test performance. The production team takes a sample of 350 phones and finds one with a defective display. How many additional phones should they sample to establish an average fraction defective for their statistical quality control initiative?

• A)1400
• B)1750
• C)2100
• D)2450

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Definitions:

Invested Capital

Funds provided by investors or lenders used by a company to acquire or upgrade physical assets like buildings and machinery.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.

Residual Income

The amount of income that exceeds the minimum rate of return expected on investments or capital.

Residual Income

The income that remains after all costs of capital used to generate revenues have been subtracted.