Question

In: Math

QD Corporation makes paints known for their quality and quick drying features. QD has developed a...

  1. QD Corporation makes paints known for their quality and quick drying features. QD has developed a new wall paint code named Mickey that it is testing in a controlled environment. The firm is testing for drying time of the paint. Drying time is affected by factors like humidity, air pollution, ventilation and temperature. The test results show that the drying time of Mickey is normally distributed with a mean of 10 hours and a standard deviation of 1.8 hours.

Compute the following:

  1. What is the probability that the drying time is less than 7 hours?
  2. What is the probability that the drying time is between 6 hours and 12 hours?
  3. What should the label on the paint can say if the firm wants to be 95% sure that the drying time will be the claimed time or less?
  4. A customer returns a can saying that the drying time was 15 hours. What is the z score corresponding to that observed value?

Solutions

Expert Solution

(a)

= 10

= 1.18

To find P(X<7):

Z = (7 - 10)/1.8

= - 1.67

Table of Area Under Standard Normal Curve gives area = 0.4525

So,

P(X<7) = 0.5 - 0.4525 = 0.0475

So,

Answer is:

0.0475

(b)

= 10

= 1.18

To find P(6<X<12):

Case 1 For X from 6 to mid value:

Z = (6 - 10)/1.8

= - 2.22

Table of Area Under Standard Normal Curve gives area = 0.4868

Case 2 For X from mid value to 12:

Z = (12 - 10)/1.8

= 1.11

Table of Area Under Standard Normal Curve gives area = 0.3665

So,

P(6<X<12) = 0.4868 + 0.3665 = 0.8533

So,

Answer is:

0.8533

(c)

85% corresponds to area = 0.85 - 0.50 = 0.35 from mid value to Z on RHS.

Table gives Z = 1.04

So,

Z = 1.04 = (X - 10)/1.8

So,

X = 10 + (1.04 X 1.8)

= 11.872

So,

Answer is:

11.872

(d)

X = 15

So,

Z = (15 - 10)/1.8

= 2.7778

So,

Answer is:

2.7778


Related Solutions

3. You wish to show that the wood stain your company has developed has a drying...
3. You wish to show that the wood stain your company has developed has a drying time under 180 minutes. You can assume that drying times are normally distributed, and it is known that ? = 25. You take a sample of 22 drying times and collect the following sample data: ? = 172, ? = 24.8. a. Perform a hypothesis test at the 0.05 level to see if the drying time is under 180 minutes. Make sure to include...
INDIANA CORPORATION …… is a bakery that is known for its strawberry cheesecake. It also makes...
INDIANA CORPORATION …… is a bakery that is known for its strawberry cheesecake. It also makes 12 different kinds of cheesecake as well as many other types of bakery items. The company uses normal costing with direct-labor dollars as their base for allocating overhead to its various bakery products. The company estimates overhead for the upcoming year of $421,000 and estimates direct labor of $2,000,000. The following estimated information is available for their Strawberry Cheesecake product: Annual production 17,500 units...
Garvin has developed eight dimensions that can be used in the assessment of the quality of...
Garvin has developed eight dimensions that can be used in the assessment of the quality of a product. Similarly, some other authors have worked on the dimensions that can be used in the evaluation of the quality of a service. Identify five main dimensions that can be used in the assessment of service quality. [10 marks]. As part of the ISO 9001:2015 requirements, a company has to measure the level of service quality offered to its customers. Using the dimensions...
Garvin has developed eight dimensions that can be used in the assessment of the quality of...
Garvin has developed eight dimensions that can be used in the assessment of the quality of a product. Similarly, some other authors have worked on the dimensions that can be used in the evaluation of the quality of a service. A. Identify five main dimensions that can be used in the assessment of service quality. [10 marks]. B. As part of the ISO 9001:2015 requirements, a company has to measure the level of service quality offered to its customers. Using...
Palencia Paints Corporation has a target capital structure of 30% debt and 70% common equity, with...
Palencia Paints Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. Its before-tax cost of debt is 13%, and its marginal tax rate is 40%. The current stock price is P0 = $31.50. The last dividend was D0 = $2.25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places. Do not round your...
Palencia Paints Corporation has a target capital structure of 45% debt and 55% common equity, with...
Palencia Paints Corporation has a target capital structure of 45% debt and 55% common equity, with no preferred stock. Its before-tax cost of debt is 13%, and its marginal tax rate is 25%. The current stock price is P0 = $22.50. The last dividend was D0 = $2.50, and it is expected to grow at a 7% constant rate. What is its cost of common equity and its WACC? Do not round intermediate calculations. Round your answers to two decimal...
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with...
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8%, and its marginal tax rate is 40%. The current stock price is P0$22.00. The last dividend was D0$2.25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC?
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with...
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 9%, and its marginal tax rate is 40%. The current stock price is P0 = $28.50. The last dividend was D0 = $3.00, and it is expected to grow at a 7% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places. Do not round your...
A company has developed a design for a high-quality portable printer. The two key components of...
A company has developed a design for a high-quality portable printer. The two key components of manufacturing cost are direct labor and parts. During a testing period, the company has developed prototypes and conducted extensive product tests with the new printer. The company's engineers have developed the bivariate probability distribution shown below for the manufacturing costs. Parts cost (in dollars) per printer is represented by the random variable x and direct labor cost (in dollars) per printer is represented by...
A company has developed a design for a high-quality portable printer. The two key components of...
A company has developed a design for a high-quality portable printer. The two key components of manufacturing cost are direct labor and parts. During a testing period, the company has developed prototypes and conducted extensive product tests with the new printer. The company's engineers have developed the bivariate probability distribution shown below for the manufacturing costs. Parts cost (in dollars) per printer is represented by the random variable x and direct labor cost (in dollars) per printer is represented by...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT