The Local Police Department Must Write, on Average, 5 Tickets

question 114

Multiple Choice

The local police department must write, on average, 5 tickets a day to keep department revenues at budgeted levels. Suppose the number of tickets written per day follows a Poisson distribution
With a mean of 6.5 tickets per day. Interpret the value of the mean.

• A) The number of tickets that is written most often is 6.5 tickets per day.
• B) Half of the days have less than 6.5 tickets written and half of the days have more than 6.5 tickets written.
• C) If we sampled all days, the arithmetic average or expected number of tickets written would be 6.5 tickets per day.
• D) The mean has no interpretation since 0.5 ticket can never be written.

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Definitions:

Goodwill Method

An accounting approach for handling goodwill during a business combination, where goodwill is not amortized but tested annually for impairment.

Capital Balances

The amounts shown in a company’s books representing the capital owned by partners or shareholders.

Profit and Loss

A financial statement, also known as an income statement, that provides a summary of a company's revenues, expenses, and profits/losses over a given period of time.

Partnership

A formally established way of running a business by two or more participants who equally handle the administration and profit-sharing.