# Finance

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.

1. 👍 0
2. 👎 0
3. 👁 102

## Similar Questions

1. ### stat

Problem 2. THE PROBABILITY THAT A RANDOMLY CHOSEN SALES PROSPECT WILL MAKE A PURCHASE IS 0.20. IF A SALESMAN CALLS ON SIX PROSPECTS, A. WHAT IS THE PROBABILITY THAT HE WILL MAKE EXACTLY FOUR SALES? B. WHAT IS THE PROBABILITY THAT

asked by siddhi on May 1, 2012
2. ### Statistics

The probability distribution of number of calls coming to a call center every 15 minute period is shown below. x 5 6 7 8 9 10 11 12 13 p ( x ) 0.02 0.04 0.07 0.08 0.09 0.11 0.12 0.13 0.10 Continued… x 14 15 16 17 18 19 20 p ( x

asked by meri on July 6, 2015
3. ### Statistics

Using formula P(x) = x/15 For each of the values x = 1, 2, 3, 4, and 5. a. probability distribution of x. b. Show that the probability distribution of x satisfies the properties of a discrete probability distribution. c. mean of

4. ### Statistics

An investigational drug study is being conducted. The initial screening phase needs to include enough people so that the final (approved) group has at least 10 patients. The probability of a person being approved for the study is

asked by Craig on June 6, 2009
5. ### Statistics

Suppose that the probability distribution of a random variable x can be described by the formula P(x) = x/15 For each of the values x = 1, 2, 3, 4, and 5. For examples, then, p(x=2) = p(2) = 2/15 a Write out the probability

6. ### Statistics

Assume a population of any 4 numbers(suppose: 4,8,15,19). Select a random sample of size 2 with replacement from the population. List all the possible samples and their corresponding values of x̄ “x-bar” and then find the

asked by Ali on November 16, 2010
7. ### Probability and statistics

1. In a City, out of 20000 news paper subscribers, exactly 5000 subscribe to The Hindu. An advertising firm surveys 500 different subscribers of these 20000 subscribers. The random variable X = the number of The Hindu subscribers

asked by Arun on March 2, 2012
8. ### IT

4. Modify the program of Problem 3 so that it also computes and displays the employee’s net pay. Net pay is gross pay minus deductions. Assume that deductions are taken for tax withholding (30% of gross pay) and parking (\$10 per

asked by F COOPER on November 21, 2010
9. ### PROGRAMMING PROBLEMS

4. Modify the program of Problem 3 so that it also computes and displays the employee’s net pay. Net pay is gross pay minus deductions. Assume that deductions are taken for tax withholding (30% of gross pay) and parking (\$10 per

asked by F COOPER on November 21, 2010
10. ### Math Statistics

An investigational drug study is being conducted. The initial screening phase needs to include enough people so that the final (approved) group has at least 10 patients. The probability of a person being approved for the study is

asked by Craig on June 6, 2009

More Similar Questions