Question: When returns from a project can be assumed to be normally distributed, such as those shown in Figure 13-6 (represenled by a symmetrical, boll shaped
When returns from a project can be assumed to be normally distributed, such as those shown in Figure 13-6 (represenled by a symmetrical, boll shaped curve), the areas under the curve can be determined from statistical tables based on standard deviations. For example, 68.26 percent of the distribution will tall within one standard deviation of the expected value (T: 10) Similart. 95.44 percent wil fal within two standard deviations (D 2 and so on. An abbreviated table of areas under the normal curve is shown next Number of OS From Expected Value .50 1.00 1.50 1.65 2.00 + and- 3830 6826 8664 9010 9544 + or 915 3413 4332 4505 4772 Assume Project A has an expected value of $32,000 and a standard deviation (a) of $6,400 a. What is the probability that the outcome will be between $28,800 and $35,200? (Round your answer to 4 decimal places.) b. What is the probability that the outcome will be between $19,200 and $44,800? (Round your answer to 4 decimal places) c. What is the probability that the outcome will be at least $19,200? (Round your answer to 4 decimal places.) d. What is the probability that the outcome will be less than $42,530? (Round your answer to 4 decimal places.) Probability e. What is the probability that the outcome will be less than $25,600 or greater than $35,200? (Round your answer to 4 decimal places) Probability
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