On Average, a Major Earthquake (Richter Scale 6

question 62

Multiple Choice

On average, a major earthquake (Richter scale 6.0 or above) occurs 3 times a decade in a certain California county. What is the probability that less than six months will pass before the next earthquake?

• A).1393
• B).8607
• C).0952
• D).9048

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Cash Inflows

The total amount of money being received by a company, usually from its operations, investments, or financings.

Depreciation Expense

Refers to the allocation of the cost of a tangible asset over its useful life.

Incremental Net Income

The increase in net income resulting from a particular business decision compared to the scenario where the decision is not made.