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.
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