The Number of Visible Defects on a Product Container Is

question 108

Multiple Choice

The number of visible defects on a product container is thought to be Poisson distributed with a mean equal to 3.5. Based on this, how many defects should be expected if 3 containers are inspected?

• A) 10.5
• B) Approximately 3.24
• C) Between 4 and 7
• D) 3.5

---

Definitions:

Cost Of Capital

The essential yield required to justify proceeding with a capital expenditure venture, such as the erection of a new plant.

Cash Flow

The net amount of cash being transferred into and out of a business, influencing its liquidity, investment, and operational strategies.

Equivalent Annual Annuity

A method used in financial analysis to compare the profitability of investments with differing durations by converting values into equal annual payments.

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionally weighted.