The Department of Commerce in a Particular State Has Determined

question 9

Short Answer

The Department of Commerce in a particular state has determined that the number of small businesses that declare bankruptcy per month is approximately a Poisson distribution with a mean of 6.4. Find the probability that more than 3 bankruptcies occur next month.

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Definitions:

Publicly-traded Domestic Corporation

A company registered in the U.S. that sells its stocks to the public on at least one stock exchange.

DRD

Dividends-Received Deduction, a tax deduction received by a company for the dividends it gets from its investments in other companies.

AMT

The Alternative Minimum Tax, a parallel tax system in the United States designed to ensure that individuals and corporations pay at least a minimum amount of taxes.

Small Corporations

Businesses typically characterized by a limited number of shareholders, assets, and revenues, and may qualify for certain tax benefits and simpler regulations.