A Product Consists of Three Serial Components with Reliabilities of 0.70,0.80,and

question 10

Multiple Choice

A product consists of three serial components with reliabilities of 0.70,0.80,and 0.90.If all of the components must work for the product to work,the product reliability is

• A)0.80
• B)2.40
• C)0.90
• D)0.50

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Definitions:

Tax Shield

The reduction in income taxes that results from taking an allowable deduction from taxable income, such as mortgage interest or depreciation.

Coupon Rate

Yearly rate of interest paid on a bond, expressed in terms of percentage of its face value.

Unlevered Firm

A firm that operates without any debt in its capital structure, using only equity for financing.

After-Tax Net Income

The amount of money that remains after all taxes have been deducted from a company's gross income.