A Random Person Is Selected from a Large Population in Which

question 18

Multiple Choice

A random person is selected from a large population in which 5% are users of a dangerous illegal drug.A drug test that correctly identifies users 99% of the times and nonusers 95% of the time is administered to this individual and gives a positive result.What is the probability that this individual is actually a user of this drug?

• A) 0.99
• B) 0.94
• C) 0.61
• D) 0.53
• E) 0.51

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Definitions:

Direct Materials Purchases

The acquisition of raw materials used directly in the manufacturing of products, considered part of the inventory costs.

Materials Required

The raw materials and components needed for the production of goods.

Financial Budgets

Prospective financial statements that project the revenues, expenses, and cash flows of a business for a future period.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used for managing liquidity.