A+ Answers

The Manager of an Accounting Firm believes that total profit of the firm next year can be
modeled by using a normal distribution, with a mean of $870,000 and a standard deviation of $150,000.

(a) What is the probability that the firm’s total profit will exceed $1,210,000?

(b) What is the probability that the firm’s profit will fall to within $270,000 of the expected level of profit (ie. mean profit)?

(c) In order to cover fixed costs, the firm’s profit must exceed the break-even level of profit of $950,000. What is the probability that profit will exceed this break-even level?

(d) Determine the profit level that has only 8% chance of being exceeded next year.