If There Is a 90 Percent Chance That an Observed

question 19

Essay

If there is a 90 percent chance that an observed variance is random, the cost of conducting an investigation is $1,000, the cost to correct a variance if the investigation reveals a nonrandom cause, and the amount of loss a company expects to incur if it does not investigate a variance that had a nonrandom cause is $30,000, what is the expected cost (to the nearest whole dollar) of not investigating the variance?
A) $30,000.
B) $1,500.
C) $0.
D) $3,900.
E) $3,000.

• A) $30,000.
• B) $1,500.
• C) $0.
• D) $3,900.
• E) $3,000.

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Definitions:

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The component in a vehicle that the driver uses to select gears manually in a transmission system.

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A component used in mechanisms to keep an object in a predetermined position until enough force is applied to move it.

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A sealing surface within a yoke mechanism, where a seal runs to prevent fluid or lubricant leakage.

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A fine-grained abrasive cloth used for polishing metal surfaces to a smooth finish, often employed in metalworking and finishing tasks.