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A small telephone manufacturer that entered the post regulation market too quickly has an initial problem with excessive customer complaints and consequent returns of the

A small telephone manufacturer that entered the post regulation market too quickly has an initial problem with excessive customer complaints and consequent returns of the phones for repair or replacement. The manufacturer wants to determine the magnitude of the problem in order to estimate the warranty liability. How many telephones should the company randomly sample from its warehouse and check in order to estimate the fraction defective, p, to within 0.01 with 90% confidence?

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