A Radio Station Claims That the Amount of Advertising Each

question 76

Multiple Choice

A radio station claims that the amount of advertising each hour has a mean of 13 minutes and a standard deviation of 1.8 minutes. You listen to the radio station for 1 hour and observe that the
Amount of advertising time is 8 minutes. Calculate the z-score for this amount of advertising time.

• A)z = -9
• B)z = 0.48
• C)z = -2.78
• D)z = 2.78

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Definitions:

Sunk Costs

Past expenditures that have already been incurred and cannot be recovered.

Incremental Cash Flows

The extra cash flow from operations generated by a company when it embarks on a new project.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Incremental Cash Flows

The additional cash flows that a company expects to generate from a particular investment or project.