Use the Information for the Question(s)below

question 38

Multiple Choice

Use the information for the question(s) below.
DM Skateboard company is planning to develop a new electric skateboard.In order for the project to be successful,the company must develop a new deck to accommodate a lightweight battery and a remote that is easy to operate while moving in an open environment.The company estimates the following costs,times,and probabilities of success for each component of the new skateboard: All three risks are idiosyncratic and the risk-free rate of interest is 5%.The company does not have the resources to develop all the components at the same time.Therefore,management needs to decide in what order to develop the technologies.
-What is the failure cost index of the battery technology?

• A)0.00375
• B)0.00392
• C)0.99875
• D)0.99892

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Definitions:

Healthcare Subsidized

A situation where government or another entity provides financial assistance to reduce the cost of health care for individuals, making it more accessible and affordable.

Benefits Costs

The expenses that an organization incurs to provide benefits to its employees, including health insurance, retirement plans, and paid time off.

Employment Insurance Fund

A government-operated fund that provides financial assistance to eligible unemployed individuals, helping them to support themselves while they seek new employment.

Unemployment Insurance Claims

Unemployment insurance claims are applications filed by individuals seeking financial assistance after losing their jobs, as part of a governmental program designed to provide temporary income support.