Question

In: Statistics and Probability

Increasing the production of a machine reduces manufacturing costs and generates a culture of efficiency. The...

Increasing the production of a machine reduces manufacturing costs and generates a culture of efficiency. The distribution of maximum velocities of a group of machines is distributed normally, with a mean of 1200 units/hr and a deviation of 275 units/hr ;

a) What is the probability that a machine will surpass 1400 units/hr ?

b) To protect himself from future claims, the manufacturer of the machines plans to inform in the catalog a "maximum velocity" such that the probability of claims is 0.10 . What "maximum velocity" should appear in the catalog?

c) Finally, the manufacturer of the machines prints his catalog and shortly after, he sells 5. What is the probability that some buyer would make a claim due to the machine not reaching the "maximum velocity" informed?

Solutions

Expert Solution


Related Solutions

A machine costs $80,000 to purchase and generates an annual revenue of $26,000 with an $8,500...
A machine costs $80,000 to purchase and generates an annual revenue of $26,000 with an $8,500 annual cost. Assume that your time value of money (MARR) is 7% annually, and this machine lasts 6 years. What is the Net Future Value of this machine?
Webster Manufacturing uses a flexible budget for manufacturing costs based on machine hours. Variable manufacturing costs...
Webster Manufacturing uses a flexible budget for manufacturing costs based on machine hours. Variable manufacturing costs per machine hour are as follows:          Indirect labor                                            $5.00          Indirect materials                                        2.50          Maintenance                                                 .50          Utilities                                                         .30 Fixed costs per month are:          Supervision                                             $1,200          Insurance                                                     400          Property taxes                                              600          Depreciation                                             1,800 Part A:  The Company believes it will normally operate in a range of 4,000 to 8,000 machine hours per month, selling at a price of $10 per machine hour. Instructions Prepare a flexible budget using increments of 2,000 machine hours within the activity...
Kaufman machine is considering a 3-year project to improve production efficiency. The machine will cost $650,000...
Kaufman machine is considering a 3-year project to improve production efficiency. The machine will cost $650,000 and will lower annual pretax costs by $380,000. The machine falls in the MACRS 3-year class and it will have a salvage value at the end of the project of $160,000. The project also requires an initial investment in NWC of $50,000 which will be recovered at the end. Their tax rate is 20 percent and their discount rate is 15 percent. YEAR. 3-...
Holmes Manufacturing is considering a new machine that costs $200,000 and would reduce pretax manufacturing costs...
Holmes Manufacturing is considering a new machine that costs $200,000 and would reduce pretax manufacturing costs by $90,000 annually. Holmes would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $27,000 at the end of its 5-year operating life. The applicable depreciation rates are 33%, 45%, 15%, and 7%. Net operating working capital would increase by $24,000 initially, but it would be recovered at the end of the project's 5-year...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs by $90,000 annually. The new machine will be fully depreciated at the time of purchase. Management thinks the machine would have a value of $21,000 at the end of its 5-year operating life. Net operating working capital would increase by $26,000 initially, but it would be recovered at the end of the project's 5-year life. Holmes's marginal tax rate is 25%, and an 11%...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs by $90,000 annually. The new machine will be fully depreciated at the time of purchase. Management thinks the machine would have a value of $20,000 at the end of its 5-year operating life. Net operating working capital would increase by $26,000 initially, but it would be recovered at the end of the project's 5-year life. Holmes's marginal tax rate is 25%, and a 10%...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs by $90,000 annually. The new machine will be fully depreciated at the time of purchase. Management thinks the machine would have a value of $21,000 at the end of its 5-year operating life. Net operating working capital would increase by $26,000 initially, but it would be recovered at the end of the project's 5-year life. Holmes's marginal tax rate is 25%, and an 11%...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs...
Holmes Manufacturing is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs by $90,000 annually. The new machine will be fully depreciated at the time of purchase. Management thinks the machine would have a value of $23,000 at the end of its 5-year operating life. Net operating working capital would increase by $25,000 initially, but it would be recovered at the end of the project's 5-year life. Holmes's marginal tax rate is 25%, and an 11%...
Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax manufacturing costs...
Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax manufacturing costs by $110,000 annually. Madison would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $33,000 at the end of its 5-year operating life. The applicable depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%. Working capital would increase by $35,000 initially, but it would be recovered at the end of the project's 5-year life. Madison's...
Holmes Manufacturing is considering a new machine that costs $250,000 and would reduce pre-tax manufacturing costs...
Holmes Manufacturing is considering a new machine that costs $250,000 and would reduce pre-tax manufacturing costs by $90,000 annually. Holmes would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $25,000 at the end of its 5-year operating life. The applicable depreciation rates are 33%, 45%, 15%, and 7%. Net operating working capital would increase by $25,000 initially, but it would be recovered at the end of the project's 5-year...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT