Question

An analyst is forecasting net income for Excellence Corporation for the next fiscal year. Her low-end estimate of net income is $250,000, and her high-end estimate is $350,000. Prior research allows her to assume that net income follows a continuous uniform distribution. The probability that net income will be greater than or equal to $337,500 is

Answer 1

Answer:

$P(X \geq 337,500) = 0.125 = 12.5%$

Step-by-step explanation:

probability distribution fucntion is given as

$F_x = P(X \leq x)$

       $= \frac{x -a}{b -a} a$

where a indicate lower end estimate = $250,000

b indicate high end estimate = $350,000

probability greater than $337500

$P(X \geq 337,500) = 1- P(X < 337500)$

                               $= 1 - \frac{x -a}{b -a}$

                               $= 1 - \frac{337500 - 250000}{350000 - 250000}$

$P(X \geq 337,500) = 0.125 = 12.5%$