Beloit co. is a manufacturer of mini-doughnut machine makers. early in 2015 a customer asked beloit to quote a price for a custom-designed doughnut machine to be delivered by the end of 2015. once purchased, the customer intends to place the machine in service in january 2016 and will use it for four years. the expected annual operating net cash flow is estimated to be $120,000. the expected salvage value of the equipment at the end of four years is about 10% of the initial purchase price. to expect a 15% required rate of return on investment, what would be the maximum amount that should be spent on purchasing the doughnut machine?

This exercise illustrates that poor quality can affect schedules and costs. a manufacturing process has 130 customer orders to fill. each order requires one component part that is purchased from a supplier. however, typically, 3% of the components are identified as defective, and the components can be assumed to be independent. (a) if the manufacturer stocks 130 components, what is the probability that the 130 orders can be filled without reordering components? (b) if the manufacturer stocks 132 components, what is the probability that the 130 orders can be filled without reordering components? (c) if the manufacturer stocks 135 components, what is the probability that the 130 orders can be filled without reordering components?