A Manufacturing Process Produces Computer Chips in Batches of 100

question 34

Multiple Choice

A manufacturing process produces computer chips in batches of 100.The firm believes that the percent of defective computer chips is 2%.If in five batches the percent defective were 3%,8%,1%,2%,and 7%,how many of these fell outside of the upper or lower control limits for the proportion of defective computer chips in a batch?

• A)0
• B)1
• C)2
• D)3

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Definitions:

MIRR

Modified Internal Rate of Return; a financial metric that adjusts the traditional IRR to account for differences in reinvestment rates and financing costs.

Internal Rate

Commonly known as the Internal Rate of Return (IRR), it represents the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Modified Internal Rate

A version of the internal rate of return (IRR) adjusted for scale and risk, providing a more accurate reflection of an investment's profitability.

Cost of Capital

The critical rate of return a firm is required to earn on investment projects to hold its market stance and entice financiers.