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1. You are given the following information regarding the CAP test for clerical employees (clerk-2s) at the Berol Corporation: Average tenure as a clerk-2: 7.26

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1. You are given the following information regarding the CAP test for clerical employees (clerk-2s) at the Berol Corporation: Average tenure as a clerk-2: 7.26 years Number selected per year: 120 Validity of the CAP test: 0.61 Validity of previously used test: 0.18 Cost per applicant of CAP: $35 Cost per applicant of old test: $18 SR: 0.50 SD, in first year: $34,000 Use Equation 10.1 to determine (a) the total utility of the CAP test, (b) the utility per selectee, and (c) the per-year gain in utility per selectee. 2. Referring to Exercise 1, suppose that after consulting with the chief financial officer at Berol, you are given the follow- ing additional information: variable costs are 0.08, taxes are 40 percent, and the discount rate is 8 percent. Use Equation 10.2 in this chapter to recompute the total utility of the CAP test, the utility per selectee, and the utility per selectee in the first year

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