I need help on this study problem.-----

A firm computes the probability distribution of possible net present values for a project and finds that it has an expected value of $125,000 and a standard deviation of $75,000. Assuming that the distribution of net present value is normal, compute the probability that the net present will be less than zero.--------------------

You will need cumlative normal distribution table. First calculate how many standard deviations away from the mean is zero. (125/75)=1.67
Look up this in the table. In my stats book, the value is .9525. Ergo, in 95.25% of the time, the value will be zero or more.

To solve this study problem, you need to use the cumulative normal distribution table. Here are the steps to calculate the probability that the net present value will be less than zero:

1. Calculate the number of standard deviations away from the mean that zero is. To do this, divide the difference between zero and the mean ($125,000) by the standard deviation ($75,000): 125,000 / 75,000 = 1.67.

2. Look up the corresponding value of 1.67 in the cumulative normal distribution table. The table will provide you with the probability of a value being less than or equal to that number of standard deviations away from the mean. In this case, the value in the table is 0.9525.

3. Interpret the obtained value. The value of 0.9525 corresponds to the probability that a randomly-selected net present value from this distribution will be zero or more. Therefore, subtract this value from 1 to find the probability that the net present value will be less than zero: 1 - 0.9525 = 0.0475.

So, the probability that the net present value will be less than zero is 0.0475, or 4.75%.