The Internal Auditing Staff of a Local Manufacturing Company Performs

question 94

Multiple Choice

The internal auditing staff of a local manufacturing company performs a sample audit each quarter to estimate the proportion of accounts that are more than 90 days overdue (delinquent) . The historical records of the company show that over the past 8 years, the average has been that 14 percent of the accounts have been delinquent. For this quarter, the auditing staff randomly selected 250 customer accounts. What is the probability that at least 30 accounts will be classified as delinquent?

• A) 31.86%
• B) 18.14%
• C) 81.89%
• D) 63.72%
• E) 75.84%

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Definitions:

Standard Normal Distribution

A probability distribution that has a mean of zero and a standard deviation of one, also represented by the standard normal curve.

Z-score

A measure that describes a value's relationship to the mean of a group of values, represented in units of standard deviation.

Third Quartile

The value that divides the top 25% of a data set from the bottom 75%, often used as a measure of data spread.

Quartile

A type of quantile which divides the range of a probability distribution into four intervals of equal probability, used in describing the spread of a dataset.