Instruction 5-6 from an Inventory of 48 New Cars Being Shipped to Shipped

question 15

Short Answer

Instruction 5-6
From an inventory of 48 new cars being shipped to local dealerships,corporate reports indicate that 12 have defective radios installed.
-Referring to Instruction 5-6,what is the probability out of the 8 new cars it just received that,when each is tested,exactly 2 of the cars have non-defective radios?

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Definitions:

Margin of Safety

The difference between actual or expected sales and the break-even point, indicating the amount by which sales can drop before a company incurs losses.

Break-Even Sales

The amount of revenue required to cover total fixed and variable expenses during a specific period, resulting in no profit or loss.

Current Sales

The total sales revenue that a company generates in the present or most recent accounting period.

Operating Leverage

A measure of how sensitive a company's operating income is to changes in sales volume, indicating the degree of fixed versus variable costs.