For the Binomial Distribution with the Given Values for N

question 75

Multiple Choice

For the binomial distribution with the given values for n and p, state whether or not it is suitable to use the normal
distribution as an approximation.
-n = 24 and p = 0.6

• A) Normal approximation is not suitable.
• B) Normal approximation is suitable.

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Definitions:

Present Value Factor

A coefficient used to calculate the present value of a future amount of money or stream of cash flows given a specific rate of return.

Cash Flows

The net amount of cash being transferred into and out of a business, illustrating its ability to generate and use cash.

Incremental Analysis

An examination of the additional benefits and costs of certain business decisions.

Fixed Overhead

Regular, unchanged costs incurred by a business in its operation, such as rent, salaries, and utilities, which do not vary with the level of production or sales.