The quality control department of a company has decided to select a sample of 20 items from each shipment of goods it receives and inspect them for defects. It has been decided that if the sample contains no defective parts, the entire lot will be accepted
a. What is the probability of accepting a lot that contains 10% defective items?
b. What is the probability of accepting a lot that contains 5% defective items?
c. What is the probability of rejecting a lot that contains 15% defective items?
a. 0.1216
b. 0.3585
c. 0.9612
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Golden Fritter Corporation has a current ratio equal to three. If Golden Fritter issues $1,000,000 in long term bonds and uses the proceeds to purchase inventory, what will happen to the current ratio?
A) Increase B) Decrease C) Stay the same D) Change, but more information is required to determine the direction of the change. E) None of the above.
Suppose a foreign investor who holds tax-exempt Eurobonds paying 9% is considering investing in an equivalent-risk domestic bond in a country with a 28% withholding tax on interest paid to foreigners. If 9% after-tax is the investor's required return, what before-tax rate would the domestic bond need to pay to provide the required after-tax return?
a. 9.00% b. 10.20% c. 11.28% d. 12.50% e. 13.57%