On a Particular Production Line, the Likelihood That a Light

question 117

Multiple Choice

On a particular production line, the likelihood that a light bulb is defective is 5%. Ten light bulbs are randomly selected. What is the probability that none of the light bulbs will be defective?

• A) 0.0105
• B) 0.0746
• C) 0.3151
• D) 0.5987

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Definitions:

Variable Cost

Expenditures that fluctuate according to the degree of production or the volume of goods produced.

Fixed Cost

Costs that remain constant regardless of any change in a firm's activity level, such as lease payments or insurance premiums.

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.

Discount Rate

In discounted cash flow analysis, it's the rate used to bring future cash flows down to their present worth.