A Florist Is Buying a Number of Motorcycles to Expand

question 129

Multiple Choice

A florist is buying a number of motorcycles to expand its delivery service.These will cost $87,000,but are expected to increase profits by $3000 per month over the next four years.What is the payback period in this case?

• A)12 months
• B)18 months
• C)24 months
• D)29 months
• E)36 months

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Definitions:

Binomial Random Variable

A type of random variable that takes on a fixed number of trials, each with two possible outcomes.

Normal Curve

A symmetrical bell-shaped curve that describes the distribution of many types of data where most occurrences take place around the mean.

Continuity Correction

An adjustment made when approximating a discrete distribution with a continuous one, often applied in binomial and poisson distributions.

Binomial Distribution

A probability distribution that describes the number of successes in a fixed number of independent experiments, each with the same probability of success.