What Is the Central Limit Theorem? How Does This Theorem

question 22

Essay

What is the central limit theorem? How does this theorem justify the use of random samples?

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Definitions:

Non-normal Cash Flows

Cash flows that do not follow a regular or predictable pattern over time, often seen in investments with variable returns.

Initial Costs

Initial expenses required to start a project, including setup, acquisition, or investment costs.

MIRR

Modified Internal Rate of Return, a financial measure used to assess the attractiveness of investments, adjusting for the cost of capital and considering the reinvestment of cash flows.

NPV

Net Present Value, a method used in investing to calculate the difference between the present value of cash inflows and outflows over a period of time.