Use the information for the question(s)below.
DM Skateboard company is planning to develop a new electric skateboard.In order for the project to be successful,the company must develop a new deck to accommodate a lightweight battery and a remote that is easy to operate while moving in an open environment.The company estimates the following costs,times,and probabilities of success for each component of the new skateboard: All three risks are idiosyncratic and the risk-free rate of interest is 5%.The company does not have the resources to develop all the components at the same time.Therefore,management needs to decide in what order to develop the technologies.
-What is the failure cost index of the remote technology?
A)0.00200
B)0.99800
C)0.00210
D)0.99810

Question

Use the information for the question(s)below.
DM Skateboard company is planning to develop a new electric skateboard.In order for the project to be successful,the company must develop a new deck to accommodate a lightweight battery and a remote that is easy to operate while moving in an open environment.The company estimates the following costs,times,and probabilities of success for each component of the new skateboard:  All three risks are idiosyncratic and the risk-free rate of interest is 5%.The company does not have the resources to develop all the components at the same time.Therefore,management needs to decide in what order to develop the technologies.
-What is the failure cost index of the remote technology?
A)0.00200 
B)0.99800 
C)0.00210 
D)0.99810

Quizplus · Accepted Answer

The failure cost index of the remote technology is given as 0.00210.

Use the Information for the Question(s)below