THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 140

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The average checking account balance at a local bank is $1,742 with a standard deviation of $132.A random sample of 70 accounts is selected.
-What is the probability that the average balance for these accounts is less than $1,700?

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Definitions:

Required Rate

is the minimum return that investors expect from an investment, taking into account the risk level compared to the risk-free rate of return.

Net Present Value

A valuation method used to determine the attractiveness of an investment opportunity, calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Profitability Index

A financial metric used to evaluate the desirability of an investment or project, calculated as the present value of future cash flows divided by the initial investment cost.

Discounted Payback

is a capital budgeting method that calculates the period of time required for the discounted cash flows from a project to recoup its initial cost.