Checkout Times in a Grocery Store Follow the Exponential Distribution

question 10

Multiple Choice

Checkout times in a grocery store follow the exponential distribution with a mean time of 6.5 minutes.What is the probability that the checkout time (T) for the next customer will be less than 5 minutes?

• A)0.537
• B)0.463
• C)0.257
• D)0.950

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Definitions:

Interest Rate

The proportion, typically expressed as a percentage, at which interest is charged by lenders on loans or paid by banks on deposits.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.