The Mean Life of a Particular Brand of Light Bulb

question 31

Multiple Choice

The mean life of a particular brand of light bulb is 1200 hours and the standard deviation is 75 hours.Tests show that the life of the bulb is approximately normally distributed.It can be concluded that approximately 68% of the bulbs will last between _______.

• A)900 and 1100 hours
• B)950 and 1050 hours
• C)975 and 1475 hours
• D)1050 and 1350 hours
• E)1125 and 1275 hours

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Definitions:

Crossover Point

The point at which two or more different financial indicators meet, often used in budgeting to identify when an investment will start to generate profit.

Mutually Exclusive Projects

Projects where the acceptance of one will automatically exclude the option of accepting the other.

IRR Rule

A guideline for evaluating potential investments wherein an investment is considered acceptable if its internal rate of return exceeds a predefined threshold.

NPV Rule

A principle stating that an investment should be made if its Net Present Value (NPV) is positive, indicating that the project's returns exceed its costs.