The Mean Life of Pair of Shoes Is 40 Months

question 60

Multiple Choice

The mean life of pair of shoes is 40 months with a standard deviation of 8 months.If the life of the shoes is normally distributed,how many pairs of shoes out of one million will need replacement before 36 months?

• A)500,000
• B)808,500
• C)191,500
• D)308,500
• E)705,100

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Definitions:

Cash Inflows

Money received by a business from its operations, investments, or financing activities.

Discount Factor

A multiplier used to calculate the present value of future cash flows; reflects the time value of money.

Invested Today

Refers to the allocation of resources, such as capital or time, in the present with the expectation of future returns.

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An interest rate or return that is promised by a lender or issuer to an investor for a fixed period.