Builtrite has calculated the average cash flow to be $16,000 with a standard deviation of $4000....

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Builtrite has calculated the average cash flow to be $16,000 with a standard deviation of $4000....

Builtrite has calculated the average cash flow to be $16,000 with a standard deviation of $4000. What is the probability of a cash flow being greater than $11,000? (Assume a normal distribution.)

Group of answer choices

A.10.56%

B.39.44%

C.60.56%

D.89.44%

business finance

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Answer 1

Answer #1

Answer : Correct Option is (D.)89.44%

Calculations

Z = (Cash Flow - Mean) / Standard Deviation

= (11000 - 16000) / 4000

= -1.25

Z value lower than -1.25 is 0.1056

Therefore Probability of Cash Flow lower than 11000 is 0.1056 or 10.56%

Probability of Cash Flow Higher than 11000 is 0.8944(1- 0.1056) or 89.44%

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Answer 2

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