A Company Is Studying the Number of Monthly Absences Among

question 17

Multiple Choice

A company is studying the number of monthly absences among its 125 employees. The following probability distribution shows the likelihood that people were absent 0,1,2,3,4,or 5 days last month. Given the probability distribution,which of the following predictions is correct?

• A)60% of the employees will have more than one day absent per month.
• B)There is a 0.04 probability that an employee will be absent one day per month.
• C)There is a 0.12 probability that an employee will be absent two days per month.
• D)There is a 0.50 probability that an employee will be absent 0.72 days per month.

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Definitions:

Allowance Method

A technique in accounting used to estimate and anticipate bad debts (uncollectible accounts receivable) and adjust the books accordingly.

Allowance for Doubtful Accounts

A contra-asset account on a company's balance sheet that represents the estimated portion of accounts receivable that may not be collectible.

Allowance Method

An accounting technique that estimates and sets aside a portion of accounts receivable deemed uncollectible as an allowance for doubtful accounts.

Account Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.