Accounts Receivable Have Been Grouped into the Following States

question 41

Essay

Accounts receivable have been grouped into the following states:
State 1: Paid
State 2: Bad debt
State 3: 0-30 days old
State 4: 31-60 days old
Sixty percent of all new bills are paid before they are 30 days old. The remainder of these go to state 4. Seventy percent of all 30 day old bills are paid before they become 60 days old. If not paid, they are permanently classified as bad debts.
a.Set up the one month Markov transition matrix.
b.What is the probability that an account in state 3 will be paid?

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Definitions:

Ester Hydrolysis

A chemical reaction in which an ester is converted into its constituent alcohol and acid by the action of water or a hydroxide ion.

Major Product

The main product formed in a chemical reaction, which is generated in greater amounts compared to any other product.

Major Product

The chemical species that is formed in the largest amount from a chemical reaction, indicating the most favorable pathway under the given reaction conditions.

Major Organic Product

The primary chemical product formed in the highest yield during a chemical reaction, especially in organic synthesis reactions.