A Machine Is Made Up of 3 Components: an Upper

question 13

Multiple Choice

A machine is made up of 3 components: an upper part,a mid part,and a lower part.The machine is then assembled.5 percent of the upper parts are defective;4 percent of the mid parts are defective;1 percent of the lower parts are defective.Assuming that the parts function independently of each other,what is the probability that a machine is non-defective?

• A)0.8330
• B)0.7265
• C)0.9029
• D)0.9815
• E)0.8902

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Definitions:

Market Value

The estimated amount for which an asset or company could be sold on the open market.

Optimal Distribution Policy

The distribution policy that maximizes the value of the firm by choosing the optimal level and form of distributions (dividends and stock repurchases).

Capital Gains

Capital gains are the profits realized from the sale of assets such as stocks, bonds, or real estate, which exceed the purchase price of these assets.

Stock Dividends

The payment of additional shares of a company to its existing shareholders instead of cash.