A School Is Required by the Government to Give Some

question 60

Short Answer

A school is required by the government to give some randomly chosen students a standardized test. From previous experience, the school knows about 68% of their students will receive passing scores in math and English. To improve funding, the school needs to score at least 70% on the standardized test. This year the school can decide if it wants to test 100 or 200 students. Should the school test 100 or 200 students? Explain the answer.

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Definitions:

Return on Investment

A measure of the profitability or efficiency of an investment, calculated as the net profit from the investment divided by its cost.

Residual Income

Operating income that exceeds a set minimum return on operating assets, used as a measure of the profitability and performance of a business unit.

Division

A segment within an organization that focuses on specific products, services, territories, or customers, usually with its own set of management and financial goals.

Division's Margin

The profit margin measured at the divisional level, reflecting the division's ability to generate profit from its revenues.