The Green Machine Experience (GME), a local rhythm and blues band, has developed the following data for its prospective income statement. All sales and expenses are paid in cash.

Required:
(a) Calculate the expected cash flows for GME
(b) Calculate the standard deviation for GME's cash flows
(c) Provide a 95% range of cash flows. Assume a normal distribution for revenues.

Transcribed Image Text:

20% Probability Sales Commission expenses Salaries Rent Depreciation expense Total expenses Net income 30% 220,000 12,232 20,000 15,000 22,000 69,232 150,768 50% 180,000140 10,008 20,000 15,000 22,000 67,008 112.992 7,784 15,000 22,000 64,784 75.216